Savings for Baby

J.,

You should consider a 529 plan. These are flexible and are not state dependent.

Good luck,
H.

Read everything about the college plan that you are considering but all of the ones that we looked into for our kids provided a reimbursement of some sort if your child does not attend college or gets a scholarship or goes out of state. The other thing that we have done is we have purchased stock for our children when they were born. They each have 3 stock certificates on their walls and we have explained the idea of investments to them slowly as they grow up. We intentionally purchased stock in companies that they would be familiar with (McDonalds, Home Depot, Target, John Deere, etc) so that it would be more meaningful for them. They also each pay out dividends so each quarter my children receive a small check in the mail as a return on their investment. That money they can spend or we deposit into their savings accounts.

Good luck,
K.

Here is a good website to check out:
https://www.texascollegesavings.com/

Also, here is some information from Dave Ramsey's site:
http://www.daveramsey.com/etc/cms/saving_for_college_9550...

There is a lot of information out there. Just make sure you understand whatever you are getting into :)

Hi J.,
check out http://www.savingforcollege.com/ it has all of the 529 plans. You don't have to use one for Texas, you can use the best one to fit your needs. Congrats!!

Congratulations!

You may want to speak with an accountant to figure out the best current way to save money for your child.

A savings or a tuition plan is always a good idea. Our daughter was given a Texas tuition plan and she attends college out of state.. The plan pays about $3400 per semester (based on Texas rates), the out of state tuition is $19,000 per semester at our daughters College.
The plan is based on what the tuition costs in Texas State Colleges run.

If your child decides to attend a certified trade school, this plan will also pay. The Texas law just changed so that if your child decides not to attend any type of school after graduation, you will receive the original amount paid into the account and I think a small percentage in addition.

Our daughter also was given a savings account. The family can deposit into the account or she has always been good about placing a percentage of her money into this account.

In high school she began purchasing CD's each time her account reached $1000.She has enjoyed collecting these. Once she purchases the CD, she does not consider this "spending money".

Last year, I attended an informational meeting for the Texas College Savings Plan (the new version of the Texas Tomorrow Fund). If I recall correctly, they said that if your child decides to go out of state, the funds collected can be converted to a 529 Plan. It might be worth checking into.

Best wishes, and congratulations on your new addition!
M.

You want to open a 529 account in your name with your child as the beneficiary. It can be used in any state. The funds can be withdrawn tax free for high education use. Even if your kid gets a scholarship or something of that nature a certain amount can be withdrawn without tax and penalty. You can set it up so anyone can make contributions. And if your child doesn't use it at all or decides not to go to college, you can transfer the beneficiary to another family member and retain all the tax benefits. When shopping around for one, pay really, really close attention to the fees charged. I started one for my son last year when he was born and the 529 offered by the state of Utah had the best fees and solid returns. Money magazine also recommended it. It doesn't matter if you live in Texas and use an out of state 529 because Texas doesn't have a state income tax so there isn't any additional state-centered tax benefits you'd be missing out on.

Also, I know some folks are saying things like perhaps he/she won't go to college. And yes, there are some jobs that don't require degrees but it's changing. My husband is a video game director. This industry typically was one that pays well and doesn't require a degree. However, that is changing. Because companies are being built with goal of selling them in a few years, they are starting to look more towards folks with college degrees because a company will be valued for more if they have more employees with college degrees.

You can start a savings plan for him, but that's not to say that he will even go to College. Some of the highest paying jobs don't even require a college degree. However, if you start it for him, then it should be his money regardless. There are many ways to save for things like that like savings accounts, money market accounts, cd's, and if you're money savvy then you can try investing in a stock and by the time he is in college, there should be a good chunk of change in there. Good Luck.

She can just go to a bank and open a savings account, it doesn't have to be a college fund account. Most banks have staff members to help with this kind of thing. It's not a big deal.

My financial advisor suggested setting up an UTMA account. You can contribute up to $5,000. per child. Another option is the 529 Plan but it reduces the possibility of your child gets a scholarship. Another option is a college savings bond, but I don't know much about them or the yields. The Texas Tomorrow Fund is now closed because the state cannot pay for the escalating tuition costs.

Robert at Fries Financial in College Station set up a 529 plan for us. He's incredibly honest and very easy to work with. Best wishes to you!

Hello J.,

We are using the Texas Tuition Promise Fund at www/texastuitionpromisefund.com . It is pretty cool you pay in today's dollars for school 18 (or however many) years from now. With the cost of education rising 7-9% or more per year it is a good investmen. While it is primarily designed for Texas public schools, the money can be used for private and out of state schools. There are 3 different levels of schools with 3 different levels of payment (junior college, 2nd tier Public school (i.e. Texas Tech or SW Texas, and 1st tier (UT and A&M). For example right now it is ~$10K a year to go to UT and in 18 years it could be ~25K to got to UT, if you kid decided they didn't want to go to a Texas public school, they could use the money for tuition at a private Texas school or any school out of state. It is a petty simple system as you buy units and there are a 100 units for approximately 30hrs of college course. Some drawbacks are it only pays tuition, not room, board, books, lab fees, graduate school etc. Some more positives are that it is transferable to other family members and the value of your kids saving is not tied to the stock market so you are guaranteed to have the money for tuition available when your kid needs it. I would definitely encourage your friend to look into the Texas Tuition Promise Fund as it has some good features.

Good Luck!

Hello, I have 2 little ones and a friend of mine said that the best one to join when the open enrollment is the Texas tommorows fund. He has it for his 2 daughters the earlier you start it locks in rates of college tuitions at todays' prices, apparently if your kid should get a scholarship or choose not to go or go somewhere else you still get the money you put in just not the matched money they put in with you. You may want to check out there website or google it for more info.
Hope it helps,
H.

The Texas fund has gone belly up so that option is no longer available.

I went with CollegeAmerica 529. It is basically an IRA.

You should be able to read all about it online.