Husband and I are trying to really grow our mustaches, and that means NO divorce :)
My husband and I are divorcing
I didn't realize this was an old post, and thought these two were days apart!
Sorry to hear about the divorce. =/
Your daughter is 5, and owns approximately $850,000 (331k + "just over 500k"). This will grow, by the time she's an adult, to multiple millions.
Given that...
I am going to try and fully fund her undergraduate education myself
Why?
You're (about to be) a single mom, taking care of a kid, while still trying to provide for your own retirement/FIRE.
This isn't even a case of take care of your own parachute first, then hers.. she has her parachute taken care of, by your generous parents, and it's a golden one. Funding her undergrad education yourself? I don't see why.
The 331k (plus growth) will be available at 18 to pay for all of college and then some. The 500k (plus growth) will be available at 30 to fund FIRE.
The best thing you can do is teach her fiscal responsibility, so that the money DOES set her up for life, and that she doesn't blow through it. The best way is by setting an example. Be frugal, teach her about good money choices. I'm torn about when to tell her about the inheritance, but that'll be something to carefully consider.
Good luck!
I hope the divorce goes amicably, and you move to a much happier state after. :)
Also very sorry to hear about your divorce. I know what that is like, single dad to a 3yo here.
I agree with Arebelspy. Don't put too much pressure on yourself! I know that probably sounds like crazy talk. But I've done the same as a separated parent. You can hung up pretty quick thinking about the impacts on your small child. It consumes you, as does the pain of the separation. You worry immensely on how your terrible failure will negatively impact your child, and try and compensate for it.
But. Your child needs you! Make sure you look after yourself. Its SO important. Think about your future. Your child needs you forever, as an adult too. If you are careful now, you could be FIREd by the time she grows up. You'll still be around to support her. If you are FIREd you can do that so much better.
You are already awesome at being frugal and saving money, and avoiding Affluenza, as good as anyone on here. Your daughter will no doubt inherit this from you :-) With that amount of money to cover College and more, she'll be super ok. 500k in 25 years time, sheesh.
There are lots of threads on here about runaway nesteggs. Its far, far more common than not that people don't outspend their retirement. Putting extra money into your daughter now, just magnifies that more.
Think of it another way. Who knows what your daughters adult life will be. But she might grow up to be a Mum too. (sorry, non American English ;-)). If you work on your own FIRE, you can be around to be a grandmother as much as possible. Your parents, although they only had one grandchild, no doubt knew the immense joy of this.
Of course its your decision. But make sure you look after yourself :-)