Financial Advice from a Softball Dad

[jonriv]

As many of you are aware, I work in the financial services industry. Everyday i deal with clients that have not saved enough to retire, kids college etc.... There are many times that ths is due to lack of means- there are just people that are just getting by. This is always sad. What can be equally upsetting is the very large number of clients I deal with who had the means, but just did not do it. I would say this this group is larger than the first I mentioned.

My Daughter just got in the mail an offer from the Company she is interning with(an will again next summer) Offering for her to join their 401k. My wife(who is also in finance) and myself were exstatic. My daughter(a finance major!) was ho hum. We set her straight with some examples of dollar cost averaging and time value of money etc.. but her apathy at that age is understandable(45 yrs to retiremnt is a lifetime to a 20 year old)

Here's my advice- i give it to younger employees. I give it to clients. Save often and early. Every year you wait to save will cost you 4 to catch up!!!

For those softball parents- the scholarship would be nice(but no guarantee) If you have not started a college savings- start it now!! Put in a $100 a pay period(or whatever) I tell parents- Christening money, Birthday Money, Confirmation, bar Mitzvah- whatever!!!!- put it in, set a goal of what you think you will need and save towards it. Don't be reliant on grants or other govt programs. Finacial aid???? Good luck if you are in the middle class or up. Control your own families destiny and choices. Don't ever be in the position of having to say- I wish you could go here, but we just can't afford it.

College costs are riduculous-no arguement here(I will have two going next year!), but crying about it will not solve anything.


So here are my questions?

1) Have you saved anything?

2) Are you saving anything on a monthly basis?

[jonriv]

http://www.savingforcollege.com/college ... ge=results

This is a link to a pretty good college savings calculator

[hit4power]

Having put one all the way through college and now almost halfway with number 2, a couple of learnings

1) Colleges seem to grossly underestimate travel expenses for students. Unless your kid is attending school across town, you will likely see higher travel costs than the school estimates, especially if flying is involved. And that doesn't count your own travel costs to watch DD play ball.
2) Housing - many schools quote the cost of on campus housing but often times don't have enough on campus housing for all students for all four years. We found their estimates of the cost of off campus housing to be stupid low. Depending on where you are, off campus housing may be a reality for your kid for part of their time at school and may cost a lot more than on campus housing,
3) On the plus side, we recognized decent savings vs. college estimates on food. Both kids went to the bare bones meal plan (or no meal plan) and supplemented with their own shopping and group cooking. They both enjoyed doing this and they quickly learned to manage a budget. The other source of "savings" is that you've already been paying to feed this kid at home, so you should recognize a decrease in the home food bill as well (especially when its a teenage boy that leaves)

[softball65]

We've put 3 thru college and were able to save up for all of them. In turn we taught them to save themselves and thankfully they all do. They all have significant savings in their 20's. Saving often and early is NOT something I was taught but I learned it and tried to pass it on.

Great advice!!

[jonriv]

I was very fortunate early in my career to have several mentors who helped me in setting up retirement plans and then college accounts for my kids.

I can't emphasize enough how important it is to start early and keep at it!

[Sam]

The cost of a college degree is quickly making a college degree irrelevant. The cost is exceeding the benefit. Kids/parents are paying $140K to a non-descript school for a piece of paper. If the kid has student loans for that $140K, they will end up paying about $360K over a 20 year period.

The schools need to reduce costs in order to remain competitive. They don't right now because the Feds hand them money so that the academics may be pacified. In turn, they attempt to brainwash our children with liberal drivel. I digress.

The way to drive down college costs is to abolish the Department of Education, which has existed only since 1979. Once the colleges are weened off of the federal Government teet, the costs will come down.

It would also result in the removal of Title IX requirements in college.

[jonriv]

Ironically- several schools have found it beneficial to raise tuition in order to attract more students(makes them seem more desirable) If you see most colleges- they are not cutting costs, but building more and more. They keep raising tuition(not so much due to financial aid) but that there are more students chasing the same number of slots. You are right, at some time point something has to give if the cost/benefit is no longer there.

Would love for student loan/financial aid to put limits on the coast (if you want the $$ you need to lower costs.

In the mean time, knowing the systems will not change dramatically anytime soon, I wood make sure that I am prepared.

[blackwidow]

I was never taught to save and didn't even worry about the future. I was fortunate enough to marry a man who is the complete opposite of me. We put one through college already and are half way through the second because of his foresight.
My oldest is a big saver. We tease him because he is so tight with his money. My DD, not so much. She is a shopper. But she is still in college and isn't really spending any of her own money yet.

We do well but our tax burden is ridiculous. We are independent business owners and last year alone we paid over 45,000. in federal and state taxes not to mention 12,000. In property tax!
If you want to know why I'm always railing against the state, there's one reason. DH works his ass off and to hand that money over to the IRS especially to support programs that we find morally reprehensible just chaps my hide. Any advice on lowering that burden?

May everyone have a happy, prosperous, and peaceful New Year.

[jonriv]

$12,000 property tax- would be low in these parts

I hear you with the tax burden- many times over

There are many things an idependent business can do- the tax code is very favorable to small business and property owners--- find a good account or tax attorney- you might find the cost worth it

[AlwaysImprove]

Started following Dave Ramsey about 5 years ago. http://www.daveramsey.com/home/

Plenty of books and tools on his site. Amazing once you pay everything off, how much money you actually have coming in every month. We are down to house payment i.e. no cars, no short credit cards/short terms. Should be through the house pretty quickly. Wish I would have started many years ago.

Given Taxes and Economy over the last 6-8 years we have had to battle to maintain income levels. We had to dig pretty deep to get everything paid off. For example going out to eat is extremely rare, like twice a year.

All that said. DD getting a lot of scholarship money has been a major overall upswing for the family. Did not go into the sport for money, never played for the money, but if you can get it, take it, and be extremely thankful for it.