How I Save For College
Posted by moonimus on Apr 28, 2008
I routinely think about saving for Baby Moonimus’ college education. She will be celebrating her first birthday soon and I hope some of our guests will give us cash gifts so we can fund her 529. We aren’t making regular contributions to Baby’s 529 but once her birthday passes and we clear our credit card and personal debts, we’ll be contributing monthly.
A couple of weeks ago, Morningstar rated the Best and Worst 529 College Savings Plan. Unfortunately, the NY 529 plan was rated as one of the worst. New York does not offer many investment options which was one of the reasons for its poor rating. When I signed up, I was frustrated that there wasn’t an international investment option. I will be writing a letter to ask the administrators of the plan to add more investment options. If New York did not offer the tax break for resident investors, I would have chosen another state’s plan.
We also enrolled in Upromise which is a service that helps you earn rewards by shopping at Upromise vendors. If you shop online through the Upromise portal, then you usually receive 1% of what you paid in your Upromise account. If you register all your credit cards online you can earn 1% - 8% of what you spend at participating restaurants. Once you’ve accumulated $25, Upromise will make a contribution to your 529 plan quarterly. We’ve earned about $70 in our first year. Not big money but every little bit helps.
I received an email from Upromise asking us to switch our energy supplier and receive 3% of our electricity charges and a $25 bonus. I need to research this but it seems like an interesting idea. We would earn an additional $36/year through this offer.
Annual inflation for college costs is about 4%. If a 4 year public school costs $60,000 and 4 year private school costs $120,000 today, then a public school 18 years from now would be about $117,000 and a private school would be about $234,000! Hopefully, we’ll have smart, accomplished kids who win some big time scholarships.
How do the readers save for college?
