Any Financial Advisors here?

[Fawteen]

Thinking about setting up an educational fund for my grandsons.

At a glance, you can only put $500 a year into an Educational IRA, which don't seem like much. I'd prefer it to be tax advantaged, but that's not as important as having control over how (or if) it's spent.

Basically, I'm willing to put money aside for tuition, lab fees and books, period. NO other expenses, if you want to live off campus, get a job.

Don't care WHAT sort of education we're talking about, traditional college, or trade school. NO on-line or distance learning, too easy to blow it off. Pick a subject and stick with it, or lose the money. One shot deal, you quit, you lose.

Time limited, use it under the above guidelines before the age of 25, or lose it.

(If you get the idea that I don't think my grandsons or their mother are capable of handling money intelligently, you'd be on the right track.)

 

[RobMD]

student loans. I did them. It's good for responsibility after college.

 

[Anonymous-0]

Wrong board. Sorry.

 

[Fawteen]

Two problems with that:

1. Not enough controls over how the money is spent. A "new computer for school" qualifies, so they go out and blow $3500 on a gaming megabox instead of the $1000 laptop they really need.

2. Too easy to duck the responsibility after the fact with a phoney-baloney "bankruptcy". My son did that, and I lost of lot of respect for him over that little dodge.

 

[farmall100]

check out clark howard dot com. He is a consumer advocate from Atlanta and has a daily radio show. He is always very imformative about how to save money and spend what you have more wisely. There is a program called 529A (I think) where relatives can set aside money for education for children , grandchildren, etc.

 

[Fawteen]

Thanks, I'll do that.

 

[Jay (ND)]

I am NOT a financial advisor, but I think I might be able to help you. The Education IRA can be funded at more than $500, however you don't get a tax deduction on the overage. I believe that you can put out $500 per person in different accounts and then be able to deduct $500 X however many.

Lastly, you have direct control over it. If your son or daughter turn out to be no good, you can skip them and give it to their kids, if they are no good, you can give it to their kids, etc. Also, if none of them are any good, you can use it for yourself for higher ed. The control is yours.

This is the way the Ed. IRA has been explained to me.

Hope this helps.

Jay

 

[Howard H.]

More and more colleges are developing pre-pay plans which lock in today's tuition rates and fees (more or less depending on the school and plan). The best part of this is it helps limit the cost up front.

Also, some offer "bank accounts" in which you may put money into after the student is enrolled there, subject to restrictions on how it may be spent or applied by the student.

Not all offer these (my university doesn't, even though we've looked at ways that we might in the future), and if you don't know which college you might be dealing with, this may not help.


Howard

 

[Fawteen]

Ah. I hadn't thought about just putting more in and taking the break on what I could. I'll keep that in mind.

 

[Fawteen]

That's just the thing. I doubt the older boy (16) will want to go to a traditional college, but he might be interested in a trade school.

Too early to tell on the younger one. (He's 9)

 

[Jim in NC]

You can put up to $2000 in a Coverdell ED. IRA. Works Like a Roth IRA and very flexible. I had one of these for my daughter and it worked well. Check out 529 plans as they may have a purpose for you. I think my planner likes the Nebraska Plan best.

 

[Lorie]

Still paying on my college loans. Couldn't file bankruptcy on them. What stinks about college, you go to school for a trade (Me-veterinary technician) get student loans to get the degree, then the type of work pays less than $10/hr (in Maine) to start. You can barely live off the wage let alone pay back the loans.

 

[Jim in NC]

That is $2000 per year in the Coverdell. Much more in the 529 plans.

 

[Eric SEI]

As I understand financial aid, they will qualify for more aid if you have control of it. That is how it is on regular savings, I don't have experience with 529s and such.

 

[Anonymous-0]

When you chose your training course, wasn't there any discussion about what the starting pay would be? Loans are meant to be paid off, including the low-interest student loans. Skipping out on responsibilities via filing bankruptcy is not a given.

 

[Anonymous-0]

"You can barely live off the wage let alone pay back the loans."

Why did you borrow the money if you knew the wage wouldn't allow you to pay it back?