Financial planning for college

financial planningHow does one save for college when raising two small children, starting a new business, and paying for a mortgage? Oh, yes, we set aside some meager bond investments and set up a savings account, but in the end it wouldn’t even come close to paying for one semester of college.

When a family relative passed on and left a trust fund in our family’s name for our children to use for college, we believed this would be our ticket. For about ten years we didn’t do any serious saving except for putting away monetary presents the children received on various holidays. We believed the trust fund would pay for any school our children would choose. However, the person responsible for maintaining the fund and the fall of the stock market ended any hope this would be a feasible means to afford our children’s college education.

So now my eldest is about 15 years old. We had some Savings Bonds, small stock investments, certificates and a savings account. At this time I also spoke to a financial advisor at my credit union who suggested I invest some of the money in a 529. Within six months I lost $500 and could not afford to lose anymore so I withdrew … so much for advice.

My first son excelled in school, and we were both so proud of his accomplishments. We wanted to make him happy so we left the decision to him as to where he would go to school. The sky was the limit … blindly going into a commitment as if money was no object. We knew his first choice was an Ivy League school with a big tuition bill and would also require expensive air travel. What’s money …you can’t take it with you, right?

We basically had the same plan for my daughter who would be following her brother in college the following year, and we had saved just about the same amount of money for her.

Where could we come up with $30,000 for the first year of college? Personal loans, home equity loan, borrow from whom? We knew we would need to borrow and not having gone through the process before, we were not sure of where we would get the money.

 

Saving for College