Saving and Paying for College

College. To some the word brings up recollections of fraternity parties, sporting events, all-nighters studying, political demonstrations, making life-long friends and getting started on the path to adulthood. For parents the word college brings up other thoughts such as, “How am I going to pay for it?” and “Will my child qualify for financial aid or a scholarship?” and “How much money will we have to borrow?”.

Saving for a college education is something I started doing when my first child, Craig, was born twelve years ago. Little by little it’s grown and I know I’ll be able to help pay for his education but probably won’t be able to pay for the whole thing on my own. Here’s what I’ve done so far…

1. I made a one-time investment (gift) of $1,000 when my son was born – I opened an account that my son will get when he turns 18 – just in time for college. It’s in a UGMA (Uniform Gift to Minors Account) to simplify the paperwork. Unfortunately the investments haven’t done well but the intention was good.
2. I opened a 529 account – On a monthly basis, I have an automatic transfer between my checking account and a 529 for my son. I picked an aggressive investment style through the fund manager and will move it to be more conservative as college gets closer.
3. I opened a Upromise account – I’ve heard lots of mixed things about Upromise but we’ve really made it work well for us. I’ve saved over $4,000 through mine and my families spending through their company network. The best thing is the Citi Upromise credit card where 1% of all my spending goes into this account which then sweeps into the 529.
4. We invest gifts from family and friends – Our family and friends know we’re doing what we can to save for college so for birthdays and holidays when our children get gifts they often get a small check for their college savings 529 account.
5. Relying on other sources – We know we’ll need more than we’ve saved so we already know we’ll be looking at scholarship resources, financial aid, loans and more. We also expect our children to work part-time to help pay for their own education. If they have to work for it too they’ll appreciate it a lot more once they get it.
6. We entered this contest :-)