I could write a novel on what it took me to put 3 kids through college, and also had all 3 in college at the same time. So what does it take?
1) Frugal living and savings pennies from the time we were married, going camping instead of airline flights to Hawaii, etc....yes, if you have kids and care about them there are sacrifices to get them off to a good start in life. We told all 3 of them it's a "family event", not individual.
2) When the kids were young I set up a college matching account for their baby sitting/lawn mowing jobs, so for each 1$ they gave me I matched it 100%. This got them to save, and also that college was important.
3)We told each child that they would have to get a job in high school and also in college (even if only 10 hrs per week) and every August they paid the college $3000 toward their college tuition. Kids need to have skin in the game as well so they watch their spending and you need to instill good money/spending habits early on.
4) we applied and took our FAFSA loans for each child. We told each child that they would come out of college with a $10,000 loan. Again, more skin in the game for them.
5) Here's one you dont here alot about and that's HELP your child find out what they want to major in and do in life, nothing is more wastefull then spending a 5th year to get a bachelor degree (that's $20-30k saved right there), so starting in early high school start to poke around at what interests them, take them to your work, their Uncles/Aunts work, etc. Kids these days seem to have no opportunities to try stuff and see what they might want to work in. If the have no clue what they want to do in life after they graduate from highschool seems pretty wasteful to send them off to a $40,000/yr college, instead go to a community college and live at home to figure it out first.
6)Dont let your Child tell you where they are going to College if there is a cheaper and better school as an alternative. It's a family decision. Ric Edlemen's Truth about Money book has a good chapter that tries to give parents a "back-bone" and tell your child you're not spending $50,000 a year for a degree that has little payback. It's not a comfortable discussion, and yes your child will hate you for a few months (they eventually get over it) but your the parent, and it's your money. One of my kids wanted to go out of state to another Big-ten college (for an extra $10,000 per yr) just to get away from some friends she no longer liked, and I just said "no you're not" you can get the same education in-state for a lot cheaper, and guess what, everything turned out fine. For those really tight on money also consider 2 yrs at your local community college and then transfer to the big U. you'll save huge $$$ this way, and I know lots of families doing this now.
7) Take out a 529 plan somewhere and fund it! Also claim your state tax deduction too. Invest conservatively since this is money you NEED to have, even if you have 10-15 yrs of time, I would stay under 60% stock mutual funds, and if you're within 3-5 yrs stay will all bond type or even CD or principle protection type funds. Try and get a head of college inflation, but dont loose your principle either.
8) Since college inflation can be 4-15% per year (I've track Illinois state school inflation over the past 10 yrs) also consider the 529 pre-paid tuition plans, I was too late for this, and they dont seem to ba as good of a deal as they used to be but they should be considered. Just remember that junior now has to go to a state school.
9) When you child moves into an apartment, give them a price range or max amount that they can rent (we used $500), otherwise they'll want to pick the Ritz. Give them a rent and food allowance, make them pay for their own fun too. Take this monthly allowance out of your 529 plan and keep a running log and keep all reciepts for any IRS audit. Your kid will whine of course being on a budget or not getting a nice fancy apartment like their rich friends, but tell them that college kids are supposed to be poor and broke, builds character as my Dad alway said.
10) Read! Read! Read! The most important thing is to stay informed, this web site of Joe's saved my butt, so I am forever indebted to you! thanks Joe & his supporting staff. Once a month I log in and catch up on the message board and any new postings. I subscribe to several financial magazines and use the internet alot.
11) By reading and staying informed, I was able to take 2 years so far of the American Opportunityu Tax credit as well, another timely gold mine for me, save me another couple of $1000's on my taxes. So getting my kids through college has been difficult, I feel like an Accountant and spend more than enough time reading and book keeping with the 529 withdraws, and keep expense logs, reciepts, and trying every angle to route college expenses through my 529 plans or the AOTC tax credit while it last through 2012.
that's it for a high level summary. good luck to everyone out there.
