Here are my equally random responses and thoughts
I like the tax advantages of 529 plans, but LO isn't going to be heading to college for 17-18 more years at the earliest. What is higher education even going to look like then? What if she doesn't want to go to college but wants to learn a trade? What if she doesn't want to learn a trade but wants to start her own business? 529 money is locked up for traditional college (I think? Or am I wrong?) and that would reduce future flexibility. I have no idea what my kid will be like in 18 years, and she may want nothing to do with college.
I am not in the US so can’t speak to the advantages or details of the 529 of mentioned.however, do any of us know what our kids are going to want or not want todo in the future, Heck, they sometimes don’t know what they want to do for week. That being said, it doesn’t mean we still can’t be ready for the future. We still save for our children’s education because for us, it would be worse if they want to school and choose not to because of money. I wish I would have just c9ntinurd with my masters, but $ was a concern so I stopped. For us, because we are in the position to do so, we have plan to assist up to their first post graduate. If they don’t go, we will collapse the fund, and it will go to something else.
In terms of if they go to college are not, there are studies that indicate the parents expectations and views are one of the larger indicators on of they go to higher education. It’s not the only factor, as the kids ability is one too, but in our house our kids are expected to go, they don’t even think it is an option
This is really up to you on how you view education, but I honestly would try to figure out exactly what the child’s views are, but view it as in cases where I can, I will try to remove barriers so my kids have as many options as possible.
The other factor is that I'm still paying off student loans, and we would like to save for a 20% down payment on a house, AND I would like to save for retirement, maxing out 401k and HSA is my minimum goal for this year. Those things leave less money on the table for college.
This is a tough one for priorities. We are fortunate that we were able to do most of it as we had our kids a little later with no debt. My order of priorities would be
1. Eliminate debt, if it’s interest is more than what you would get from investing in a 529. If there I still a government grant or something of free money, that would be different. I always take te free money, I would pay off my student loans and any other debt.
2. Can you buy a smaller house? I had my house just before kids, hence why we waited a little longer.
3. You can’t borrow for retirement, but kids can borrow for higher education. So this would be m6 next priority before the kids higher education. You don’t want to have to rely on your kid so 8 think being financially secure gives my kids security. That being said, I am also willingly to work longer instead of RE. That’s my balance. If i didn’t have kids or worried a
About thei future I could probably be retired by now (in my 40’s). However, I 0lan t9 work until they are out of school. I essentiall6 choose to give up ER (FI) for the most.
One thought I had is that we're currently paying $1400/month for daycare. Once she's out of daycare and into public school, that frees up the money and we could just start investing it in a taxable account with tax efficient investments then. She will attend her current daycare/school through kindergarten, so that's 4-5 years down the road when this money will be freed up. However, I have to think that if we shifted $1400/month from daycare to "future opportunity fund for daughter" investments, it wouldn't be too hard to build up a sizeable nest egg for her at $16,800 per year.
This is a great idea. Just because you are not able to save for the kids now, it doesn’t mean that when the big expenses like daycare end, you can’t reallocate. We did that. We added more as major expenses went down. That being said, don’t forgot as they get out of childcare costs, there are other costs. We didn’t put nearly as much as we thought, but definately more.
How do you balance and think about these different priorities? How does your family save or plan for higher ed/future education/future kids opportunity expenses?
It’s going to be different for each family depening on what is important to yours. For me, I don’t mind working longer to be able to do everything else. That’s be
Asked on my values of not having to worry when I retire, i would rather have more than Ineed than worry about not enough for a longer time. Same with it’s important for me that m6 kids can go for higher education. I care less about the size of my house, so bought much smaller than we could have affordeded.
I think you need t9 decide wha5 are the most important things and go from there.