If you have kids, one of the issues that you need to consider is what you are going to do about college expenses and if you do decide to save money to pay for college expenses, where is the best place to put that money. That is what this following question from a reader is not sure about:
I have 3 kids that are ages 4, 8 and 10. I currently don’t have any designated accounts for them for college and I’m curious what I should do in this department.
I have been maxxing out our retirement plans and our home is completely paid off. We have no credit card debt and the only debt we do have is one car payment which we can easily afford.
The question I have is what should I be doing? I have looked into 529’s and prepaid tuition, but i don’t see the advantages of either of these. The CPA recommended that we not to save anything in the kids’ names due to possible financial aid impact.
I am expecting that they will take out some loans and may even need to work some as well if they all are going to college. We have some local colleges, so they could even live at home and attend if they are interested in going to one of those colleges and not taking out bigger loans.
When my kids do leave, we will most likely downsize our home. But, I don’t know what kind of market we will have then so I don’t want to depend on any profits from that for college expenses.
If you were in a similar situation, what steps would you take to start saving for your kid’s college education and where would you be placing the money?