VHmD0BSfXK-C6_-N-mJKGnwknllai2kbiVKD9-k5OPM Do you know what a 529 is?
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Do you know what a 529 is?

Raising kids is not only exhausting but it is also costly. You may be debating what school to send them to, Organic vs Regular Formula, which is fine. But what you should be focusing on is college tuition and how to pay for it. The price tag of a 4 year in-state college degree can go up to as much 200K about 15 years from today. You can use this college cost calculator by Vanguard to see how much it will be (please don't freak out like I did). Do not expect to pay all of it. Your kids should share some of the burden like we did by means of student loans. But the idea is not to cripple them with debt like we were.


Do not let yourself get "paralysis by analysis". Remember, Rome was not built in one day. You have to start somewhere. 529 is where you start. It is a designated fund which is tax protected as long as the proceeds go to college expenses. The earlier you start, the better as to allow compounding to work its magic. A $100 monthly deposit will have a big impact. Remember, the money will grow over time.


Various options for 529s explore them here. Make sure to read the fine print. Given the low costs, I like Vanguard 529 plans. Sure you have prepaid plans available in certain states, however, most have restrictions which make them less desirable in my opinion. Make sure to do your research beforehand.


Do your children a favor and start them off with a 529 or a prepaid plan.


Till next time.


JL

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