I am contributing $2000 per year to my daughter’s ESA. $2000 is the annual contribution limit for an Education Savings Account. My daughter is seven years in old and in the first grade. The chart below gives an idea of how much money I will have saved by the year 2018, when she begins to go to college. After creating this chart, I realized these things:
I will probably NOT be able to save enough money to pay for all of her education.
Whenever my daughter goes to school, she will have to work a part-time job to help with college education expenses.
I have a three year old son, and I need to start saving for him NOW, and I do not need to wait until he starts kindergarten.
If my financial situation improves in the next 12 years (and I have every reason to believe that it will) I may save for my daughter’s education using another type of savings account.
Hopefully, the annual contribution limits associated with an ESA account will be raised in the next few years.
It’s very, very weird to think about my seven year old daughter going to college. But, like everything in our futures, we must think about things BEFORE we have to pay for them.
6 thoughts on “My Simple College Savings Plan”
That’s great, I wish my parents had done that. Are you assuming your daughter will go to a private school? Or out of state? A state school is much cheaper and if you live within a commuting distance to one, the living costs drop drastically, if you let her live at home. I managed to pay for all my college education by living at home and working, a lot. However I think my estimated cost for university (tuition only) was probably less than $15,000. Though I understand that it’ll cost way more in the future =(
She’ll more than likely attend the University of Georgia or Georgia Southern University. Both are public universities. The estimated cost for a year of college at UGA (for 2006) was right at 15K.
My attitude was that I would do what I could and we would figure out the rest when we got there. Your project 50 thousand or so is a really good start. I wouldn’t get frustrated or cut your family short over it.
At the rate you are going you will be in great shape financially when the kid is ready for college, so you should be able to augent the college savings then or she may have to work a bit herself.
I have one child with a doctorate and another with a masters and it all worked out okay.
You’re doing great!
If she goes to Univ of GA or GA Southern (and the laws don’t change), she should get free tuition on the Hope scholarship, right?
If the Hope scholarship is still around, and her grades are okay, then she should get free tuition, thus drastically reducing the eventual total costs. But, I’d rather be “safe than sorry.” As we get closer to when she actually goes off to college, I’ll have a better understanding of the actual amount I need to save. The good thing about the ESA, you can withdraw money for any educational expense, at any educational level, and you can transfer the money to another family member, if need be.
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