As frequent coolmom readers may know my family had our savings stolen from us thanks to Madoff, Stanley Chais and other cronies. My entire retirement, forced to sell our home and Vivien’s and my step kids college fund vanished. Nothing like having your future put in jeopardy to focus the mind. After that disaster I have become far more active and alert to the issue of building a nest egg. As we all know, in the economy that might mean putting change in your kids piggy bank. And as you may have heard college costs are akin to the space program, so some planning is in order
Recently, a bunch of So. Cal bloggers converged in my favorite restaurant, Campanile, natch, to discuss saving for college. As the wine flowed ( wine, it should be the official drink of motherhood) we discovered that the mom bloggers went from “What is a 529?” to a the super savvy “why is California one of only 13 states in the union that doesn’t give a tax incentive for 529’s?”
MY POV at dinner, lady on the right is the smarty pants who runs Scholarshare, far left always fun Sarah from MomsLA, and my new fave Kristen from Rage against the mini van. My wine glass at bottom of frame. Dry, white, with minerality.
The dinner was sponsored by Scholarshare. This is the State of California’s 529. Each state has them, but only one per state. If you are in the “what’s a 529” camp think of it as a 401k for children. The money grows tax free until your child goes to college, or a trade school, not for a motor cycle. Anyone can contribute at anytime… so if you would rather grandma not buy another Barbie for your daughter, ask her to put that money in the fund. The reason Scholarshare took us out to dinner so we ( the various bloggers) would write about it is this:
1) they just started with a new fund. , TIAA-CREF which they are fired up about.
2) they have lowered their limit for entry. To start get into their fund one only has to start with $25.
3) Contest! Scholarshare is having a contest on Facebook till Sept 26th. They want people to “tell their story” about saving for college. Winners are chosen at random so if you don’t have a super sad sack story, it’s cool, you still have a chance. Two winners will get $1,529 ( get it, 529, get it?) for their kids, you guessed it, 529.
4) They have lowered their fees. Since we have been rebuilding our financial selves Mark and I have been automatically deducting money from our account for our little kids into a 529 from a different state. Thumbs up for that plan as I don’t count that money in my monthly budget, so I don’t miss it. However, after this dinner I did think …hmmm I need to check my fees on our 529. (according to Scholarshare The annual asset based management fees now range from 0.18 percent to 0.62 percent, vs. 0.25 percent to 1.06 percent with old plan). A child can have more than one 529 so theoretically I could open one with Scholarshare with the State of California and even keep the one in the other state. I won’t say which one it is, but it rhymes with Ball Sacka.
Here is when I put the wine glass down and really started paying attention: I asked the well spoken rep from Sacramento what is in it for the State of California to get the word out about a fund that they don’t make money on? She said… wait for it… because they know that if people have 529’s they will cost the State less money. If people don’t save they are shelling out for more grants and loans. Now, we know how
bankrupt frugal this and other states are, and if their pencil pushers have crunched the numbers and figured 529’s offset their load they are probably right ( then I picked up the glass again)
Here I am listening, being interested and calculating in my head.
On that last shoot I did with my kids ( previous post) I tried to buck my kids up by telling them they were putting money towards college. That does help Vivien hit her mark, but Rex countered in a sing song voice, “mommy, I’m not going to college.” As he shoved red vines in his mouth taken from the craft services table (craft service is Hollywood for junk food) I’m going to chalk up his negative attitude about college to him missing Oliver. However, if my 3 and half year old still feels like that in 14 and 1/2 years ( oh, that is going to go fast) he can take the dough and go to junior college, carpenter school or I can give it to Vivien for her education. No buying tattoos with this money.
So, check out the plan, the contest also HERE.. sidebar… Scholarshare is sponsoring a talk October 17th that I am very interested in. UCLA’s Dr. Dan Siegel will speak on “12 strategies to nurture your child’s developing mind”. I’ve read one of his books and got a lot out of it.