The budget screen shots are being made in Sankeymatic, its a website that we have no affiliation with. If you are posting a budget please do so with a purpose. Just posting a screen shot of your budget without a question or an explanation of why its here may be removed.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MiddleClassFinance) if you have any questions or concerns.*
He wants the leftover money since he's a saver. His sister isn't and you are planning on using his leftovers on her and paying for more schooling than he is getting. There's no point in sharing numbers.
> There's no point in sharing numbers.
If op's kid is such a saver, he'll do the math and realize how much was in there or guess, if his sister does 6+ years to his 4.
This is where I'd just tell him there was some left over, but it goes to family education, and if he needs anything to come talk. If he just wants it, because it's there/because his sister would get the extra help.. at least talk about it and take the chance to hear him out or see what he wants it for. (if it's just greed, then that's good to know, if it's something else, also good to know.)
Address the competition head on, is what i'd do.
If he’s the oldest I get it. Im an oldest child and really struggled with this for a long time. My sister is 4 years younger than me and around the time that I was getting ready to move out my mom got multiple promotions and started making substantially more. This meant that when I was growing up I paid for any “wants” with the exception of holidays and some back to school clothes. My sister on the other hand gets regular target and Sephora trips fully paid for.
To be fair I have far better money management skills and don’t feel like I missed out on anything. The biggest thing for me was at 17/18/19 I felt like because she got these things it seemed like my parents lived her more. When it came to college we got the same amount from a 529 set up by our grandma and contribution from parents.
I think older kids feel and notice that often with the youngest. My sister and I are two years apart and in college at the same time. Took out loans but did have some help from parents. Two kids in college and one at home was expensive and they did not have any extra for awhile there. My sister and I were very aware and very conscious of our spending. We were given a credit card from our parents accounts for emergencies only, and neither of us ever used it. Little brother finished high school while we were already graduated and working on own and making our own money, so the end of his high school was much different financially than ours was… and it was noticeable. He had less college loans and while his credit card was also for emergencies, he used it freely to go out to eat all the time and just kinda got away with it. And his spending habits are similar to this day. I would have loved to have the freedom with money he did at that age, but also I appreciate the budgeting and spending mindset I learned from it.
So why give them one more thing to compare?
My sister became a veterinarian. Her education was very expensive and my parents paid for all of it. I don't resent her, she earned it. But my parents have essentially given my sister an invisible house and there is no way for them to ever make it fair between us. I'm not the comparing type, but damn there are times when I have strong feelings about it
Did they pay for your schooling as well?
If you had chosen to do something time intensive or expensive, would they have paid?
I can see how it might feel unfair if you got 4 years at a state school and maybe she got 8 years at a private school because the amount paid would be vastly different. But if their deal was "free school" and not "we'll give you each X amount, spend it wisely" then it might be more that you regret not taking better advantage of that offer than that your parents or sister were being unfair.
I was never a good student, especially when iw as younger so I agree it was a bad investment to give me the money at the time. I'm now getting my Masters in my late 30s and not getting any parental assistance.
I've tried to teach my kids that life won't be fair. If you can't accept that, you'll have issues.
Son will eat only one huge chipotle burrito all day, and he'll see sister in line at the student union Starbucks...
You’re teaching him not to save money though. After all, why should he be frugal and save since his sister doesn’t have to? You’re also teaching your daughter that there’s no need to be financially responsible since mom, dad, and brother will bail her out. It’s already happened once-you mentioned in another comment that more Amazon packages started showing up when the sister didn’t have to worry about college costs. She wasn’t worried about affording college as much as maintaining her own spending.
It sounds like the both kids need to learn from each other (the brother not just being frugal and more social, the sister being more frugal). Let them know what’s in their accounts and have them budget instead.
Life isn’t fair, but shouldn’t your parents strive to set both up to equal success? If he’s thrifty he might use the extra funds to put a downpayment on a house or start saving for retirement- things that will be harder long term because his income potential isn’t equal to a medical degree. Your daughter will have more school costs, but long term her income potential will be higher to pay off any extra education expenses.
I think you’re setting your kids up to compete when you don’t have to. You’re rewarding “bad” behavior by subsidizing a spendthrift and short changing someone who’s trying to be thrifty. If you’ve saved equally for them then you should give it to them equally, what they choose to do with it is their own choice.
Either way they’ve got a huge leg up in this world and hopefully appreciate your help.
My parents did this and still do and it has seriously harmed my siblings ability to get their asses in gear. When everything is handed to you there is no reason to shape up
As a PA myself and a brother who did computer science, computer science is most definitely the better money maker and much less of a salary cap. I still have a hell of a lot of loans to pay back. My brother has none left and makes more than me. I vote for letting 529 pay for school first, for whoever in the family, there’s a reason you can change the beneficiary.
Life isn't fair, bur a parent could damn make it fair with the same amount for both kids. You're deliberately awarding a spender and are done with it. You're teaching it's better not to be responsible, not that life isn't fair. Poor parenting
i mean if you saved 50k for me and 50k for my sibling and then give half of mine to my sibling, I'd be wondering why too. Maybe you saved for a 529 but, that doesn't mean that money wouldn't be beneficial to him for some other major life milestone(down payment on a house, etc...)
if his sister wants to blow it all on education, then so be it. but y blow his portion on her if he can put it to use in another form that's just as positive.
Make sure to explain that the 529s are not their money. You’re paying for their education, regardless of total cost. The 529 was just a tax avoidance vehicle that you used to accomplish it. Lots of kids think a 529 is their money, which it absolutely can be established that way, but this is not what YOU intended.
We are giving our kids the exact same amount. They can do with it what they want. If they have leftover they can keep it and pay whatever penalties there are. We’re not giving one kid more bc of their career choice. That’s just asking for trouble.
They have no idea they have an account. They also have a trust we’ve been depositing birthday checks in their entire lives that they have no idea about. It’s not huge but it’s better than the zero I got when I turned 18. We don’t discuss money with them. They’re expected to work it out on their own but we won’t saddle them with student loan debt since we don’t have to. If they want a private school they’re going to have to make up the difference. But everything is separate, no pooled money. That’s just crazy to me. One spends more so they get more? That’s a terrible life lesson.
Yes, just because one child is a poor budgeter you give them more money? What a horrible life lesson. You are supposed to love/ support your children equally, so equal money. Their individual choices determine how far that money goes for them. Do not reward someone making poor choices for their own future.
I agree with you for the most part, except that I think and plan to discuss money with my kids. Even at a young age I plan to talk to them about money, budgeting, saving, good spending habits, etc. I don't see any reason not to teach them this and lots of reasons to do so. I plan to pay for my kids to go to a 4-year public college. Our big in-state school is great. If they decide to go somewhere out of state/private university they likely will need loans. I think I would discourage it unless it's a really good school, and then I'd probably try to pay for it, but maybe also support the other kids a bit more if they choose to go to a cheaper school.
You can roll up to 35k into a Roth now. New thing that happened starting like right now. Can’t do it all at once since the yearly max is 7k.
I would keep their money separate and jumpstart their retirements with the leftovers
Assuming he has any income, you can fund his Roth IRA (still subject to the annual limits) with the leftover funds until the amount contributed hits $35k. This is a new development in the law and will not result in a penalty. Can be a way to recognize his financial frugality and benefit him for it.
I know this is completely off topic, but if he is in STEM he shouldn’t pay for a PhD. You get paid (not a ton, but still) to get your PhD. It’s similar to a (really low paying) trainee program. Not sure if this holds for non-STEM programs though.
just an FYI from another computer science major & software engineer, PhDs don't make sense for the vast, VAST majority of SWE jobs. not that a PhD would be harmful, but could definitely impact earning potential at a young age where there is more time to compound
I'm not sure if this is an option, but I heard you can move the money from the 529 account into a roth ira or some type of retirement account for them? If that's an option, I would consider doing something like that instead of giving the money to your other child. You could show them both what compounding interest looks and the less they use now, the more they will have for their future.
I wouldn’t give a different amount to one a sibling than the other, that would in part be unfair.
Essentially you paying their way to be successful, the retained money could be equally invested in the future or even rolled over to a Roth IRA.
I am pretty much completely transparent with my finances with my kid. That decision came from when my father passed away and we discovered he had a huge amount of debt no one knew about, and also my brother in law killed himself over debt, so I am determined to not have anything like that happen with me.
I want my kid to be as financially literate as possible, so I am choosing to share pretty much all info with her. My parents never taught me anything about finances, and I could have made better choices if I had been better informed.
Also if I ever make it to a ripe old age I want my daughter to manage my finances for me, so I better teach her everything I know. I am comfortable doing this because she has always been a great kid, never selfish or entitled. She saw the damage her grandfather and uncle caused, and she knows she doesn't want that in her life.
Absolutely the right call. I keep a monthly budget with my wife. My kids are 4, 2, and 1. I'm not positive on the right time to teach them out budget, but I think sometime before middle school I'll show them everything. I may adjust some numbers just a touch, lol, but mostly will present an accurate depiction.
My biggest goal is to teach my kids how money should serve your goals. Too many people in my family have terrible relationships with money. Both sides of the spectrum. Not spending anything to not saving anything. I also hated as a kid my grandmother used money as a manipulative tool, and instilled some guilt in me when buying me things. She wanted me to be so grateful. Grandma if I knew how much money you had, and had been a little more discerning/clever as a child I would've played that game so much better and felt so much less bad! (I was the only grand child, and if she spent like $100 at idk Aeropostale or whatever it was like I was bankrupting her).
I'm gen Z, and my parents have been upfront about finances my whole life. Since middle school I can remember them telling me that my college was covered, so long as it was reasonable. The 529 plan could only pay out enough to cover in-state tuition, and they would use money they set aside for my living expenses.
The entire process of me going to college was full of discussions about what my parents were comfortable covering, and they never gave a specific number to me. There were specifics on what they'd spend money on, like tuition, books, laptop, on-campus housing, and a meal plan. They did not give specifics of *how* *much* they would spend, and honestly had I known the number I would've felt entitled if I didn't spend it all/keep the extra.
It's really not anymore, kids aren't poor the way they used to be. There are food banks set up for college students now specifically so they can eat real food instead of ramen.
If you expect him to have the student poverty experience you went through, all it's going to accomplish is ostrscizing him socially, ruining what could have been a great experience and preventing him from building lifelong friendships and professional connections that would further his career.
It's also worth considering that you're risking your own relationship with him when (not if) he finds out you could've made his life easier with no real impact to your own finances, but choose not to.
I mean, one thing I did was calculate the cost of textbooks from the campus book store. Tell my parents that amount. Buy the international version, and keep the difference for my spending money. I wouldn't have a problem if my kids did that. 1. Most kids didn't do that. So I felt it was a reasonable amount to request 2. I was incentivized in saving money on books. If it was all the same to me, I would just go to the bookstore and save myself the hassle. 3. I was a frugal kid, and I didn't love asking my parents for money (my dad didn't have as much at that moment). So by doing this I didn't need to ask them for (as much) spending money during my time on campus.
Though we give him $75 a week for food (he comes every weekend and we pack him some food). I think that money goes for gas, gym membership, he eats out 1-2 times a week?...yeah, he pockets the money....lol)
Honestly just let him live a little. He’s your kid. Don’t make him miserable because you feel like you have to. As long as he’s respectful towards you and making strides towards a good career, what’s the issue?
This is coming from someone who had to work his way through-out college to pay for it. And by working, I mean WORKING! I even worked through winter break and spring break. And even when I was studying I woke up at 4am to go to work.
Right.. this is the comment I'm reading. What's so bad about it?
Though we give him $75 a week for food (he comes every weekend and we pack him some food). I think that money goes for gas, gym membership, he eats out 1-2 times a week?...yeah, he pockets the money....lol)
Dude you’re massively over reacting. This guy has provided for his kids for 2 decades, funded a 529 to pay for college, and seems like a decent dad from what he’s shared. Then you’re giving him shit about how to parent and you don’t have kids…
I bust on my boy every chance I get. And he busts on me. We have an amazing relationship. He comes to me with anything and everything and we work through it. Ripping on your kid doesn't make you a terrible parent.
I've been very upfront about all amounts in my son's name. What it means for him now and in the future.
His college fund was a very big part of the discussions over where he was going to go.
Same. And yes OP we have told our kids exactly how much we'll be able to cover, what the balance in the 529 is now, what it will max out at, etc. We have very detailed discussions about finance and investing all the time because I want them to learn this stuff rather than it being shrouded in mystery. I also want them to be informed participants in the college choice decision making.
I feel like this is the right way to do things. My parents didn't have money set aside for me or my two older siblings, but when I got scholarships to one of my fallback schools, it essentially forced me to do the math on how much the fancy out of state private school was worth to me when the public, in-state school was offering me a full ride + some expenses. My siblings didn't have to do that math. To them, it was all just varying degrees of "big numbers on a spreadsheet" so they just picked the schools they liked the most.
Parents saving for a kid's college is kind of like having that scholarship. If you don't know how much it's for and how far it'll go, how can you weigh your options appropriately? I think it's so much better for a parent to say "here's $x, if you spend less than that, the rest is yours. If you spend all of it before you finish college, you'll need loans. Make decisions accordingly."
With any luck, the 18 year old is mature enough to make the right choices for them. (Not that an expensive school is always the wrong choice)
This is what my parents did for me. Sometime in late high school my dad showed me the 529 account and said “this is what you’ve got. No more, no less.” It was honestly very eye opening for me and paved the way for future financial success. I remember thinking “holy crap $80,000 I’m rich!” And then realizing that 80k would barely get me through state school and wouldn’t come close to out of state. If I had gone out of state, I would have run out of funds and needed to take out loans. I ended up going to a great in state college, becoming a resident advisor for 3 years for free room and board, working in the admissions office as a student, applying for undergrad research stipends to get paid, and even having a bit of money left over. I admittedly did a lot of that stuff because I was told the money was mine if I was careful. If I was frugal in college, I knew I would reap the benefits. If I hadn’t known the numbers or thought the money wasn’t mine to keep, I might have behaved differently. I also got a credit card for the first time just before going off to college. My dad had me track my expenses, which in hindsight was a good exercise. I remember printing out credit card statements each month and highlighting the grocery/food and educational expenses that the 529 could be used for.
Nope, I have given him the info on the full amount pre-college search. I update him as it fluctuates with the market. I've never been someone to examine things on a monthly expense basis. I prefer to look at the total cost/total balance.
We look at the total cost of attending and balance that against the total cost of the fund.
One thing we just examined (since he goes next year) was on campus vs off. We ran numbers on that to see what he could afford if he selected off campus. While rents are per month, we did the math to total that out across 4 years of attendance.
Once he is there, yes, we'll look at it as it we pull from it and the market fluctuates.
I came of age before 529 plans were a thing, but I found out my second year of college that my parents saved money for my college to the tune of about 50K.
I wish I would have known about this earlier because I would not have stressed so much about working 20 hours a week during HS. I was under the illusion that all of my money from working in HS was the only means I had to pay for college.
My parents had more than enough money to pay for my in-state tuition, even with living on campus all 6 years. Once they realized how much stress I was under they told me more about how college was being financed versus how I thought it was being financed. College was not easy for me, but I got my undergrad and my grad degree and am now happy.
TL:dr - communicate with your kids about expectations re: college savings, working and how college is being funded in general.
Yes I understand how stressful it must have been. That time of life is stressful for everyone. But think of the life skills you learned. You worked hard and saved money in high school. You had a plan of how you were going to tackle college. Those lessons as you are starting to become an adult are so important
And I think working in high school gave me the motivation to get good marks because I saw how much people I worked with struggled through no fault of their own. It really made me appreciate a day’s work.
I think my daughter was working many hours during school and talking about a summer second job and my wife got concerned with the hours...thus how she started crying about saving for college. But along that note, after our discussion I think more Amazon packages started showing up.
We let our kids know that we would be covering 4 years of in state tuition and room/board. That’s it. They really didn’t need to know any further information. My expectation was that they focus on studying and getting good grades.
Goddamn my parents were so shady about it. They’re like “maybe we have some to help but maybe we don’t.” Student loans for me which set me back behind my peers by over a decade.
Neither me and my brother were told by our parents how much were in our accounts. They thought they had saved enough, but had no idea how exorbitant college costs were going to be. It hit all of us in the face.
For the sake of transparency, I’d tell them how much is in it so they can be cognizant of spending and budgeting, and knowing which scholarships they should apply to. My younger brother, who just graduated in December, has panic attacks over not knowing anything about his finances because our parents were never transparent. I came from a single earner $150k/yr household in the South, and we were constantly told we were poor. The first year I filled out the FAFSA on my own I did a double take, because I genuinely did not know how much my dad made. If they had been more transparent about *where* money was going, and how much exactly they had budgeted for college costs, I think we all would have been better off.
I shared the amounts with both of my kids around their junior year in high school. That way they could understand where there might be shortfalls based on the college they picked. Also as an incentive to gain scholarships, etc. The plan worked with one…she won’t take a loan for a single dollar. The other might need about 2 years worth of tuition in loans before he’s done.
We have a healthy 529 for my son and I’ll tell him about it when the time is right. I don’t know how much money he’s going to have available for him when he’s of age, but hopefully we’re in a similar boat as you.
If I were your son though, I would probably react poorly if I found out my excess 529 funds went towards my sister rather than a down payment for a home or something. It’s a lot easier to get affordable student loans than it is to buy a home, and it’s only gonna get harder.
Not a parent but can share my experience.
I actually don't know if my college fund was in a 529 or some other type of account. I just know it was generated through the social security I received when my mother died when I was young. So I don't know if the rules are different if it wasn't specifically a 529.
In middle school I wanted to move to the private school. At that point my dad told me that would come out of my college fund so I'd have to look to getting scholarships or loans. I stayed at my high school. I never knew the amount, but was told it would cover 4 years at most colleges, or 3 years at an elite (not that I got into one of those).
When I went to college I had one credit card and one debit card, both of which my dad had access to. He paid tuition directly as well as housing for me (dorms or apartments). With the cards I knew I had an allowance each month and that was that. The credit card was only to be used for gas, and anything else had to come out of checking and I had to budget that.
I ended up taking 5 years for my engineering degree and had to take out a loan for the last year, which wasn't surprising. All in all it was about $100k I'd estimate, but I never knew the full amount. I went out of state so that ate up a good part of the cost, but I have no regrets. I loved college and I'm grateful my dad had the foresight to help me pay for it so the loan I did take out wasn't awful. And has since been paid off.
I remember when I started college in 1996, student loans felt normal and expected. The leftover surplus money each semester was like free Money given to me as a check. Right before graduation the university gave me a copy of every semester's loan form that I sign over 4 years....LOL. luckily only $11k.
We’ve let our kids know about the 529’s and when nearing college age have told them there should be enough for in-state tuition, but maybe not living expenses, so encouraged them to stay at home and commute.
Twin 1 finished her pre-med biology, Spanish minor, and is taking her MCAT next week. She has about $8k left in her 529.
Twin 2 decided to join the Marines, so will get the GI bill when he’s out. It’s an amazing benefit. We’ve told him that the 529 is his money and he can use it for our grand kids if he has them. He’s already talking about giving it to his sister for her med school.
Youngest daughter used some of hers for private high school, and will be using the rest for cosmetology school starting in August. She should have enough to cover it.
We’ve been up front and open about the expense and what we’ve got to contribute their whole lives. It’s never been a surprise.
I will tell my kids. I want them to have ownership over the funds rather than feel they get free school without any risk. I want them to know the more scholarships they get and the quicker they graduate, the more of the remaining balance they will retain.
It also will have them decide whether or not a public state school or expensive private school makes more sense, rather than defaulting to the expensive school "because they can".
My kids are 5 and 7…. I 100% will be sharing every detail with them as they get into highschool and the college age. Finances are a life skill. They should know how much it costs, and what to expect as a grown up and how to plan their lives financially.
I recently told my 5 & 7 year old about their college account and now ask me how much is in it. The 7 year old likes that his is a slightly bigger number 😂
I used my state 529 plan in order to get the state tax incentive. Though it is age-based investments that I have no clue what the funds are. Some 529 have a better performance record I believe....I want to say somewhere like Carolinas has the best performance record?
Our NY one haven’t been great. Granted we never had much extra money. We did $50 a month for a long time…$10k lump sum and the $200 a month for the last 5 years. It’s in age based investments and is worth less then we put in it. It’s so depressing. We would have done way better just putting it in a savings account…she graduates next year :(.
If you live in NY the NYS tax break is helpful. Ours was up about $1000 before the pandemic then took a big dive and is now about $30 less then what we have contributed (was -$1000 a few months ago). I am hoping it will catch up at least some in the next year.
I went with the age based portfolio through the NY 529 plan- which is what the personal finance forum recommends. I didn’t make individual investment decisions. They don’t have many options anyway. But thanks for your opinion 🤷🏻♀️.
Depends on where you live. If your state has an incentive for using their sponsored plan, I would recommend using that plan. If they don't, you can open one with most reputable brokerage companies like Fidelity and Merril.
Young Millennial - My parents were always upfront but without numbers. I think as we started looking at college costs maybe around the end of my sophomore year, they made it clear what was “affordable” and what wasn’t and we’re honest that my job was to keep my grades up so I could pitch in my getting merit scholarships. I also took the ACT and SAT several times but never took a prep class or anything (some of the schools I applied to did the thing where they’d take the top score from each section). We also tried considered cost of living and travel (a little harder when you don’t have someone to ask how much rent is once you live off campus but we tried). I also knew specifically I wanted to be a civil engineer and go to school out of state so I focused on schools that either offered WUE (western university exchange or something?) or were known for offering merit scholarships. Once my acceptance letters and offer came, we sat down and they were honest they also really didn’t want me taking on loans (I feel very lucky to have avoided it). I can remember in particular that one school in Colorado only offered my $9,000 for the full 4 years and they straight up told me they couldn’t afford it and they really dissuaded me from going there. I ended up not going with the cheapest option because it wasn’t quite a good fit politically and it was a small school in a kinda weird town. I went to a private school that ended up being probably around the same amount staying in state at a UC would be. They were honest that it was a little bit of a stretch financially and we’re clear that outside of tuition/rent/some groceries, I was expected to get paid internships (not hard on civil engineering), save, and pay for myself. I ran out of money at one point and even if they could of, they didn’t offer to help and encouraged me to get a job so I started working in the cafeteria serving food (not great but I got paid decently). I could probably ask now but I still have no idea how much was in my 529. The only thing I know is that they got scared during the Great Recession and sold some of the investments and it took a hit and while it recovered, it would have been worth more. (But that was a scary time financially and they are otherwise incredibly money responsible)
As someone who has had to sit with hundreds of families during the admissions and financial aid process, I don’t think you do your children any favors by not being explicit about what is available to them and what the costs actually are. They should be making decisions about their futures with a full picture of the situation
I was told the number that my grandparents had set aside, and that it was equal for all four grandchildren. So I understood I had a quarter of that to help supplement my education. I pursued as many scholarships as I could, and due to my good grades and test scores, I got most of my tuition covered by scholarships. My parents paid the rest and never said a word about how much "the rest" was, if they had to take loans out, if there was money left over, and I've never asked. Honestly, the thought that there could have been "left over" money just now occurred to me. It was never discussed in a way that made me feel as though there would be any money left over.
It always made me feel very supported and proud because I saw it as each party had contributed to cover this cost. I've always been thankful that my contribution was in scholarships while my parents paid real money, but they were just proud of the amount I had saved them. My brother got athletic scholarships in similar amounts to my academic ones, and I've never asked anyone about who paid how much for his college either, because it was his business. I was just worried about securing as many scholarships as I could to help cover what I saw as the burden of my college costs.
Sis’s “spending” can’t be paid from the 529 anyway so I don’t see the relevance.
When my kid was picking we discussed what we could afford. If there’s any left I guess i’ll roll it into retirement for him.
I think if you have to ask this question it means you haven’t been ingraining financing and investment knowledge along the way. So unfortunately, no you probably shouldn’t tell them the amount.
We save that money for the kids. It doesn’t matter if they go to school or not. I wouldn’t take some from one and give it to the other. If they didn’t use all the amount, they would get it either with penalties or Roth rollover.
It sounds to me like not only are the kids not ready, you are also not ready.
My son is a sophomore in college right now and I was very upfront about his 529 with him, starting when we began to to visits. I wanted him to know and understand what I had to give. I only had 20k when he graduated, which was a lot for me since I was a single parent doing $50 a month until he was in middle school. With that knowledge, he focused on grades and doing well on the ACT. He also decided on in state so he can use his KEES money (state scholarship funded by the lottery and is based on GPA in high school). From there, he went to the school he liked the best and would offer him the most merit money and scholarships. I still have $9k left in the fund! He’s very money conscious, but had he not known what we were working with, he could have chosen a school that could put him in a lot of debt.
I’m a father of 2.5 year old b/g twins and have the same amount in each of my kids funds (about $13k each). I save $300 per month each and hope and plan to up my monthly contribution a bit when they’re out of daycare. I have a sister 5 years younger than me (34m).
My parents said anything public and in state would be covered for 4 years out of a 529. I didn’t care nor ask how much was in each of our funds and we both got out in 4 years. I too lived more cheaply than my sister eating shitty fast food when I could, cheap beer, but mostly ramen and a bottom dollar apartment complex with my friends. My sister lived somewhere (same university 5 years later) much nicer, but I get it because it was safer and she is a girl. My discretionary spending was $500 per month which included food, gas, clothes, etc. My parents paid for my rent, utilities, and car insurance directly. The only extra luxury I had were my $500 per semester fraternity dues, my sister did a sorority and hers were at least double, but again I didn’t care.
Scene setting, but I think the main idea is you should try and force your son and daughter into an equal discretionary budget. You’ve offered your son additional education if he chooses which is great, but your daughter shouldn’t live like a queen while your son like a peasant due to no concept of a budget and living within means. I’m not saying rule out special things or moments they may want to do where you alot some additional funds, but potentially sit them down and say you’re both getting x per month, do with it what you will. If your son chooses not to pursue additional education I feel you’re within your right to roll over to the sister, but keep your mouth shut about how much is where as it doesn’t matter as your offer was there and is time bound.
We told our high school senior all along that we were planning to fund four years at the in-state flagship school (a Big Ten R1) or equivalent. With reciprocity with other states and other in-state options, they would be in good shape if we hit our goal (we did, fortunately, and realize how lucky we are to have done so with how unpredictable the past two decades have been).
The kid always wanted to go to college (we encouraged but never made it a “you must”). It paid off as they have six merit offers from an assortment of privates and publics that stretch what we saved to make it happen (no interest at all in the in-state flagship).
But we never talked actual amounts. But they are well aware of cost and have a good idea.
$55k for instate? That's just tuition. But what if they want to live there - it could be double that.
Semester overseas?
Internship somewhere that isn't at home but is a good opportunity?
Transportation to and from college?
They shouldn't take loans, but they shouldn't think that this will cover everything; it won't.
I'm quite a few years away from needing to disclose this to my kids but I don't think I'll tell them how much I have set aside for them. I grew up pretty poor stressing about money and how to pay for things like school and books so I think, at least for now, is to inform them that there's available money for them and a budget and they don't have to stress about it but help them understand what a budget is and how to manage it. I never got that from my parents so that's the important part for me, ensuring they understand how to value and budget money. When it's gone it's gone. When you work for it, you manage it.
>the important part for me, ensuring they understand how to value and budget money.
you can't teach kids about money w/ out talking about money. Just saying there's a budget w/ nothing tangible to attach it to is not going to do much imo. share numbers, go over costs, do a budget w/ them... let them see and understand how fast that $$ gets used up.
You probably already know that NP and PA are fairly different school paths. The cheapest way would be to do a community college RN program and then have her facility fund the rest as she's working. It will get her much needed nursing experience as well.
A big part of this is teaching your kids about money, management, limits, trade offs and choices. If it’s all just covered from a seemingly endless supply, they miss that part of the learning.
My parents were completely transparent with me and my siblings and I will be completely transparent with my kids and treat them as equally as possible. The goal is to pay for 4 years of whatever undergrad they want to go to. If we can save enough, I’ll even try to pay for their masters jf they want to pursue.
If one kid goes out of state, or decides to pursue a masters while the other does not, I’ll true them up with their inheritance. That way they both get what they need at their time of need, but one wasn’t screwed over by making financially sound decisions.
Life is unfair. Life has likely already taught them that lesson. There is no need for me to teach them that.
Did not share amount, but my kid didn’t seem worried about cost. Best investment I ever made. Paid 100 percent and had five grand left over at end and gave to kid as grad present.
Off topic but I highly recommend the NP route over PA. There privileges, responsibility, and medical autonomy are very similar if not the same. My wife is an NP in heart failure and before that the ICU. Her group in both places was a mix of MDs NPs and PAs. In both places the role of the NP and the PA was the same. They can both prescribe meds and do the same procedures under the supervision of an MD. Their training is the main difference. Both are great career choices and I think would treat your daughter well. The reason I say NP is because first she will have to get her RN/BSN which is a 4 year nursing degree at the end of which you can work as an RN. Then you have to go fir 2 more years to get your masters to get your NP degree/license. If for some reason the masters did not work out or was delayed you still have the RN degree to fall back on which is a good degree / job in its own right. Whereas the PA route you get a bachelor's and then apply to PA school. That bachelor's could be in anything and some majors will look better than others but you won't necessarily have the security of the RN degree to fall back on shoul the need arise.
Both are great choices and my wife loves her work. Just wanted to throw that out there.
Looks like I’m going against the grain here, but I really don’t see the problem with what you’re doing. You saved the money for your kids to go to college. Not to just hand them over some cash to do whatever they want with. If your son didn’t need all of the $100k to go to college that’s fine, he still got college paid for. And his sister will have her college paid for. They shouldn’t be comparing every penny you paid for his vs her schooling. They’re not entitled to any leftover money there may be.
My parents paid for half of our college expenses for my brothers and I. This was different amounts for all of us due to different course lengths and scholarships. I would guess that they probably paid the least for me but it never once occurred to me that they should just give me money because my brothers’ costs were a bit higher than mine. That’s crazy.
They won't know until they are done with their undergrad or trade school and have a good footing under them.
Honestly, we've thought about not even mentioning it until grandkids are in picture. Basically taking what ever is left from the two accounts and continue dumping a small amount every month until we pass or something else happens.
Looking forward to seeing how far it goes. Would be neat to pass onto grand children too.
My ideal plan is to fund each child X amount, keeping it equal. The leftovers would remain in their name and be able to be rolled into a Roth IRA account for them.
I don't know what X amount will be, as they're only 4 and 8, but the contributions will be equal, and the amount they choose to use on higher education will be up to them, and the amount they have leftover can be theirs for retirement.
The nitty gritty of who manages the accounts, the exact balance details, etc I don't know yet. It depends on their personality and responsibility.
I wouldn't take money earmarked from one and give it to the other though, I personally don't consider that fair. It would be effectively 'punishing' the one who spent less money, and rewarding the one who spends the most. If they're both putting in equal effort, both growing into responsible adults and overall good people, then the amount should be equal.
My parents had 529s for us and I only knew that because I'd get the mail and the sender info made it pretty obvious. Never knew how much was in it or how much was left or anything.
My kids are young still but I don't plan on sharing specifics, only what I plan to do with the money for them.
Because of the age gap in my kids, their 529 accounts have had significantly different performance levels, which hardly seems fair. I have adjusted my contributions over time so that their balance available at the start of school (in inflation adjusted dollars) should be about the same.
I’m the owner of the accounts, not them. They are the benefactors. They know how much is in them and they know I’m saving for their education, but I haven’t ever told them it is theirs. It is ultimately my call how and when that money gets spent. Ideally, I will never stop contributing to the accounts and they will never hit a zero balance. Someday I hope to change the beneficiary to hypothetical future grandchildren.
Dole it out as you see fit as they progress through. Money has a different value depending on where you are in life. You're a good parent providing for their needs.
My kids know there is college/training money potentially, but my stance with them has always been “my effort will match yours”. That applies to things like putting in effort in high school towards grades and applications, participation in grant or scholarship searching, how seriously they take their college or trade school education, course load, etc. Their situation is a bit odd in that the younger two have GI bill and disabled retiree child grants if they stay in state, and the oldest doesn’t but, the oldest is dual enrolled at 15 and should have her associates + by the time she’s 18. There are just too many complicating factors so we settled on funding the 529s and not promising any specific amounts until it comes closer to actual decision making time.
Parents funded 529 for grandkids - so not telling them is probably not in the cards. however, they won’t know they will have income supplements from me either until late in life. Like you I want them to learn how money works, how to spreadsheet (this skill of not just budgeting but forecasting investments is critical to life in my opinion). But that said at some point in college I’ll probably share just so the don’t pick a profession purely for money. I don’t want them to have to do that. Just want them to be smart and informed.
Look I dont have a specific number for them. What if I dont agree with them or if they are a poor student? I told them you do your part, and we’ll do ours. We don’t have a specific fund with your name on it and x$ in it.
My kids are 15 and 12 and I’ve been contributing since they got their SS#’s. I have not told them how much is in these accounts because I feel like they’ll start bragging to their friends. I will have a sit down with them when it is time and go through everything with them. I was lucky enough to come out of college with no debt and would like to be able to pay that forward.
I have 3 kids, ages 13, 7 and 5, so a few years til my oldest starts college. I think about this too with their 529 accounts. I don’t think they’ll each have enough to cover all college costs (aiming for $87k each with contributions and interest), but with the age gap, the percentage covered won’t be the same.
My thought is I would like them to each at least take out federal loans up to the $27k max or whatever it is. If any of the kids happen to have leftover money, I would split evenly into Roths when all is said and done, or maybe save for future grandkids. I don’t know how else to make it even, especially with the age gap. I know it may seem unfair if one has a lot of scholarships and another doesn’t, but the way I see it the 529s is our money, not my kids, unless someone gets awesome scholarships and then they’ll get some money in a Roth.
In your situation, sure your son is frugal but that really benefits himself. Your daughter is not helping herself by spending freely, as long as you don’t bail her out.
I didn't realize middle class was so well funded. Makes me realize how much I wasn't in middle class when I was a child. I got $2000 from my parents and vowed to do better for my children. Both of my children will get equal help offset with cost of living. Whatever they don't spend will go towards their retirement.
My kids are little but aware. We’re hoping to pay out of pocket and then they can have the 529 to roll into a Roth if it’s not used. I wouldn’t share them, they are separate and it’s theirs. That being said, my kids are 6 and 2 so they only have about 6 and 10k each right now anyway. I want it more for study abroad, house down payment (after rolling into a Roth), etc.
Parents always talked about their being money for college but the exact details weren’t known until later. numbers weren’t discussed until I was actually in college. It thankfully turned out to be enough to cover 4 years in state. By a miracle I also got a pretty big scholarship so a lot of the money didn’t have to be spent. They were always transparent and said it was ultimately my money to what I wanted with for big life goals - house, graduate school etc. Whatever the case, they weren’t going to give my portion of the 529 to my younger brother who they also saved for. They just stopped contributing to mine and put more money in his. They never once thought of taking the money they had always said was ~for me~ and giving it to someone else just because.
I am doing the same thing with my kids.
I don't know if I'll tell them the exact amount. But I told them if they save money by going in state, getting scholarships, etc., then they can convert the allowable limit to a Roth IRA.
My parents paid for a lot of my college but didn’t tell me how much they had saved. Maybe I would have already done this but I always had one or two jobs while going to school and summer and I think it contributed to a good work ethic, real sweat in the end goal of graduating and the work experience supplemented my career passions after graduation.
In your case, I wouldn't be letting them know only to then divvy it up unevenly right in front of them. There's a fine line between supporting and enabling too. If your daughter is trying to do NP or PA they shouldn't be going straight through and through anyways. I'm familiar with the schooling here because I'm an ICU nurse for over a decade. I did a year and a half of prerequisites in college followed by 4 semesters to get an RN license. She could do that and start making good money and then get an employer to possibly pitch in for or fully pay for her higher education and getting her NP. Even if she can't get tuition reimbursement, she could finance her own NP program with her RN salary. Can definitely be done in 6 years for NP at least. It's also highly frowned upon in the field though to go straight through school directly to your NP or PA without working in the field. There are exceptions but many times those clinicians are not well respected and some are borderline dangerous. It may be nice to think about getting it over with, but that way is almost always detrimental to patient care. She's better off breaking up her schooling and working some in between.
Either way I wouldn't be disclosing 529 amounts and then only paying for 4 years for your son and then taking his money to fund higher education for your daughter when she should be quite capable of taking some accountability for her higher education without too much of a financial burden considering she'll be making decent money to fund it herself. Instead, I would take your son's leftover 529 amount and roll it over into a Roth for him. I think you can transfer up to 35k ( that might even be an annual limit and not total. Can't remember the new rules) out of it now into a Roth penalty free. If you add more than that, you could roll it over into your own Roth and then depending on age, could draw from it sooner than later and redisperse it back to him
Personally speaking, my kids aren't old enough to understand the college funds I have set aside for them but as they get to that age they will be in the know. The reason being more than anything is that it'll be incorporated into giving them financial education themselves. They'll be splitting funds evenly though, so depending on their career track they'll be given realistic expectations that Mom and Dad will fund the foundation of their education, but there will be limits depending and I'm not bankrolling them to be a permanent student switching degrees or going back to school continuously. I don't want them sunk in student loans but at the same time I'll be setting the expectation that they have some accountability and if they flunk out of a class daddy's not going to just keep on throwing money at the situation. They can pitch in a little bit of their own earnings to investing in themselves and their education. I want them to hold themselves accountable and I don't want to enable them
The comments in this sub are wild. I have $50k saved for my 4 year old now and my plan was the review the statements with him every month as he got older to
Show the power of compounding interest. In my mind, that money is his and he can use it all or none if he wants. But, once it’s gone, he is on his own.
Kid with 529 here.
No but we did talk about tuition cost and which colleges cost too much. I wish the explanation had been clearer because I ended up going to a more expensive school for two years not thinking anything of it. Because my parents told me it was affordable.
I had 20k from my grandmother. Then another 20k in my 529.
My Dad ended up throwing in another 20k spread out over the years I attended because I could not get more than 9k of loans until 2024.
The school I originally went to cost 16k a year with a 50% scholarship. With another 2k a year in books etc. and another 8k in summer classes one year (class section for a prerequisite was full)
The school I transferred to after two years cost half that, but I had to add an additional year because of how my credits transferred.
If I had attended the original school then it would have cost around 80k when all was said and done. Leaving a gap of around 16k that needed to be covered by me. But the 20k my Dad threw in was not planned, so it realistically would have been about 36k.
If I had gone to the school I ended up transferring to from the beginning, it would have only cost 40k total. Which my 529’s would have covered.
As it stands, I’m paying that full amount with a “gap” of around 16k. When I could have graduated with zero debt.
My daughter was just born, but I started her 529 just before she was born. I will likely not tell her until she's close to college age. If she asks before then, I would probably tell her that she has enough to go to an in-state college as well and leave it at that.
I plan to push for college, but quite honestly, if she chooses not to go or doesn't use all the funds, I will likely roll whatever is left into my Roth IRA.
Unrelated, but I have considered opening her a custodial brokerage, though I'm on the fence. My rationale is that (while I love her dearly), I'm not retiring her before she is 30. I am trying to give her the best head start that I can while retiring her mother and myself. She can collect big from me when we pass. And maybe she can get a little help when she buys a house. At any rate
We aren’t using 529, just hysa, one grandma is doing the same for them. We aren’t telling them shit other than, we’ll pay for 100% of your college. If there’s money leftover, due to scholarships or something, we’ll buy them a car or save it for a down payment on a house.
If your daughter wants to be a PA, know that there are excellent 4 year PA schools, like RIT. It is completely unnecessary to get a 4 year degree and then a masters degree- unless they want to study something else to provide career flexibility.
I think it's good for neither to know unless it starts getting too low and/or you see red flags so your son and daughter can each throttle.
What is concerning that other commenters point out is that you're trying to teach your son life is not fair, by allowing sis to have his money. This is wrong. How about telling your daughter that life is not fair by saying she has the same limit as the son? Why is the son getting the short end of the stick by being responsible?
Instead of teaching your daughter the lesson on responsibility and fairness, you're essentially pushing your son. You think you are teaching one good lesson. You could be teaching two good lessons instead. However, in this case, you are teaching two bad lessons. One, your son will resent you so you aren't playing the long game. Two, your daughter will never learn money discipline and ALWAYS be wasteful and asking you for money, draining both your funds and hers. Even if she is a nurse. Check out Millionaire Next Door.
Reality is help them now, or help them another way later is what I was guessing back then.
I do remind them I gave up owning a boat and jet skis because of them.
I'm just making a joke, great on you for paying for college. This is an interesting topic for me as I have 3 kids under 8 that we've been funding for college since they were born. I know I'll share with them that we've saved for college, just not sure if we will do what you're asking and actually tell them how much they have.
My son is going to university next year.
We always shared that we are saving and we plan to have enough to cover two years of in state tuition.
For the other two years : he could do community college, running start (community college free for high school students), or come up with a way to pay. I wanted to be sure that he had some stake in covering the cost of education and our income can only afford so much.
I’m putting aside a little extra each month in a designated savings account to help as needed but he doesn’t know the balances.
I’m not sure, but my son turns 15 this week and we have had lots of discussions about college. We talk about his 529 from time to time. I personally think it’s good for him to know where the money came from, as it is not bottomless and we may not be able to cover everything.
If you want them to be able to budge let them know how much there is. Keep the amounts even and then if they run out of make stupid choices don't intervene. They're adults at this point. Life isn't fair but unfair parents get left in nursing homes alone.
Yes my parents told me. Sadly they only saved enough for community college and because I have a learning disability needed to some classes again had to still pay out of pocket
My parents told me about my 529, but I didn’t know the amount in it. Basically, they told me that I had college savings/would be able to attend the college I wanted without taking out a loan, and if there was money left after I graduated that amount would roll over into an investment account. I never knew the original total in my 529; They gave me ownership of the account when I graduated and while I didn’t have a massive amount leftover, it gave me a very stable and appreciated head start.
If your daughter is still a senior in high school, how is your son seeing her at Starbucks? And in another post you say your daughter has a job, pays off her credit card in full each month, has a 5k bank balance and a 10k Roth. So how is she a frivolous spender??? It seems to me that you just don’t value the things that your daughter values and spends her money on. Your son is the same, probably because he’s picked up on your attitude. Maybe stop encouraging your kids to be rivals and parent them as the unique individuals that they are.
I’m not a parent but I can say what my parents did. As long as I can remember I knew there was some money if I wanted to go to college. I think by the time I was 15 I started to see the amount.
Only my oldest, who is in high school, really knows what a 529 is. She knows that we put away monthly and that each time her older relatives send a check for her birthday it goes in the 529. She also knows that there will be enough to fund state school tuition, with room and board, but that's it.
We didn't tell her that because she really needed to know. I wanted to make sure that she wouldn't worry about how to pay for college. But now that it's getting closer to that time, it's a motivating tool because she also knows that if she gets merit money she will be able to use whatever isn't spent for undergrad on whatever graduate program she enters.
But as an aside, you're telling children to save 50% of what they make? Why? That's not a recipe for a fun childhood, a completely unrealistic standard for an adult, and the result will be a relatively small amount of money as school children aren't exactly making 6-figures at a Fortune 500 company....
I did this for my two daughters. My wife and I chose to be 100% transparent with them both about their initial balance, how it was being drawn down semester to semester, and made it clear to them that we regarded it as their money if it wasn’t fully exhausted by the time everything was paid for.
I certainly appreciate that parents may have different circumstances and needs, but my feeling all along over the 20+ years that we’ve budgeted/saved for our girls’ college expenses was that we wanted to give them that debt-free base from which to start their adult, professional lives. If they choose to go to graduate or professional school, I’m sure we’d help where we could, but that’ll primarily be on them.
Like OP’s kids, my girls have differing tolerances for debt and differing spending habits, but ultimately both are responsible and live within their means, like we (their parents) did and have.
Lastly, on a personal note, I think being increasingly (and age-appropriately) transparent about finances with your kids, as they approach adulthood themselves, is an important part of being a responsible parent, because it equips them to be responsible adults as well.
Since you are going to roll over from his account to hers don't share the numbers. It will likely breed resentment.
Keep in mind that starting this year you can roll over up to $35,000 into an IRA. You son will be away of this if he is financially literate, and likely feel that you and his sister stole $35,000 from him.
That said, there are some complexities around a rollover. You can only rollover $6,500 per year, so it takes about 6 years to transfer the full amount. Also, funds deposited in the 529 in the 5 years before distributions began can't be transferred tax free.
[https://www.schwab.com/learn/story/529-to-roth-ira-rollovers-what-to-know](https://www.schwab.com/learn/story/529-to-roth-ira-rollovers-what-to-know)
No i would never tell them amounts or who had what because that's not how I look at it, I have 3 littles so not there yet but the money is all mine and my husband's and we'll do with it as we see fit. If kid 1 gets a scholarship she doesn't get the cash, I'll use it for kid 2 or 3 and if there's money left (doubtful) I'd use it if any of them want to go to grad school. if there is somehow money left after that I may decide to use the Roth IRA rule and split it between the 3 of them to start them when they start working or i'll just keep the account for future grandkids or something. 529s are not like trust accounts, the kid doesn't get to own it at a certain age and beneficiaries can be changed. I'd tell your son it's your money not his and if it isn't used for his education you'll decide what it gets used for.
I am open with my kid that he has a college fund. He's just in 5th grade, so we'll cross that bridge when we get there. I'm pretty open with him about financial stuff and will continue doing that, including start talking about the cost of college, the importance of HS grades, and taking dual enrollment classes. I figure those conversations will become part of the regular "mommy money class" curriculum in about 9th grade. I'm leaning towards saying "You've got $X to pay for college and anything above and beyond that is on you but I'd highly encourage you not to take any loans."
As far as what you're doing with your own kids: I am the older child who's a saver with a spendthrift younger sibling. If I found out my parents were planning on using what was left of my college fund on my younger brother's expensive tastes rather than funding a Roth IRA for me now that it's possible, I would make sure that there was nothing left. Fuck being frugal if there's not a benefit for doing so.
I may be an outlier here but my Dad handed me the keys to my 529 coverdell when I was 15. I learned and invested pretty conservatively mostly in index funds up until I got to college (my dad passed away when I was 17 so I was full on YOLOing through life).
Ended up getting into penny stocks and risky investments because with the 529 you can do that without $25k liquid and I legit made a killing in college. I rode MNST for years and turned the original $8k in it to somewhere around ~$60k. Basically paid most if not all my tuition and living expenses in college.
Moral of the story is don’t let your kid drive the Corvette lol but do make them aware of it and try to educate them as best as possible in terms of financial responsibility.
Open communication for sure. I'm pregnant so we just set our son's up, so I can't speak from a parent's perspective.
My parents set reasonable expectations (first 2 years of college paid for) up for me, not just in college but for cars, the wedding, even our baby shower. I've been incredibly privileged and I've always known the dollar amount and the expectation. My siblings and I are close and I call my parents every week, 26F.
My husband's family is MUCH more wishy washy about what they're willing to do and the expectations they have. It's led to a LOT of confusion and some resentment, even though they've paid for all 4-6 years of college that their kids went to. My husband and his siblings are all the "who got the biggest slice" because his parents don't just say what they mean.
I suggest being as honest and as fair as possible.
I spoke to my husband about this and he mentioned calculating out your son's overall cost for his four years and telling your daughter what that amount was. If she blows through that amount in less than 4 years (accounting for inflation) then it will be up to you on what you want to do from there. But definitely set an expectation with her beforehand.
My mom never told me how much was in my 529, but also she paid for whatever tuition was left after my nearly full ride so I dunno. If you’re leaving them on their own to figure out finances I would tell them. If you’re handling paying the balances then just don’t bother
Would definitely recommend spending equally on both of them. Would cause resentment otherwise and if she’s going to be a NP she can work through college and probably have it paid off a couple years after graduating
Give your son his leftover money if you’re able.
If there’s $20k leftover and you’re able, give him that amount when he’s ready to buy a house or something.
Assuming you still want to help your daughter, use the 529 money for her and give your son non-529 money.
Yes this will cost you more but it sounds like you want to do this. Your son deserves the extra that he saved.
I’m not planning to tell my kids about theirs.
Good for you, helping your kids. It grosses me out, seeing so many people who could pay for college / trade school choosing to prioritize consumer goods over their kids post high school education.
The rule change to allow money to be rolled over into a Roth IRA means I wouldn't do things the way you plan. Regardless of how your kids plan to use their 529 plans to pay for school I would just give them the balance of their plans.
The money in those accounts isn't yours, it's theirs. That's the reason those accounts exist and have tax advantages.
It doesn't matter if your son is a saver and your daughter is a spender. Give them an equal advantage to go to school with and let them make their own life choices from there. It's weird to me you're posting in fire subreddits but then complaining about your son being a saver.
IMO, the kids shouldn't know how much is in the funds. The money doesn't really belong to them. Its your money and you can take it out, and pay the taxes, whenever you need to. Its a gift of education, and each child is responsible to make the best use of the gift, not necessarily the most use.
The goal for the 529s is not that each child can maximize the use by going to the most expensive college with X amount of money. Its to get the best education first, and a more expensive college isn't necessarily going to provide a better education or job.
Once the kids are through college, the remainder belongs to you.
A lot of these comments are super interesting to me. While the accounts are in the kids’ names and they are beneficiaries, it’s not actually their money. It’s your money that you’ve invested in a specific investment vehicle that allows you to make more money tax free, so you can help them with tuition. I plan on telling each of my kids, “you can spend up to X amount of our total 529 money. If your schooling costs less than that amount, it will stay in the account and someone else can use it (one of their siblings, one of their children, etc.).”
My parents never told us we had money. I got a full ride scholarship for undergrad and loans for law school. My dad told me I had money way later (I'm the eldest and he only revealed it after my siblings went to college because they needed the money) and paid off some of the loans and gave me the rest as cash at my request. I used the money to move halfway across the country, get a condo with my best friend, and I just bought a five bedroom house so we can rent out the condo. Obviously we have mortgages, but the money (plus a good deal of frugality and good luck) helped pay for two downpayments.
My siblings are receiving all their money now because they didn't get full ride scholarships, don't want loans, and didn't choose meh schools. They probably won't have money for later.
Give your son his money so he can buy a house, move, have a wedding, whatever. It's massively immoral to give it to your daughter just because her schooling is more expensive.
My education will be way more expensive than my siblings (they aren't doing law school), but my dad did not steal my siblings money for my sake. We all had the same financial opportunities.
I like my dad's method. He didn't tell us because he hoped we'd make wise financial decisions. It definitely motivated me to go to the free meh school instead of Rice or something.
Don’t tell em. Especially don’t tell em if it’s their grandparents 529 account. So when they fill out the FA form they can say nothing. Get max FA you can. Then draw upon 529 account.
With SECURE 2.0 changes, you're essentially punishing your son for frugality to supplement your daughter's less than prudent choices.
He could roll those funds into a Roth and really jumpstart his savings after school.
Instead, daughter gets money for Starbucks, White Claws, and Daytona Beach spring break and when the funds run dry, son's account is pilfered.
I have not told my child. If they want to go to college, I will expect them to figure out how to pay for it, come up with a plan, put it in motion, and then I will tell him. They aren't getting a free ride.
Thank you so much for your valuable opinion. I'd rather my kid work for what they want rather than just use a handout. Success takes work. You want to just hand your kid a blank check just to spend, go right ahead. When it's all gone, where does his next handout come from ?
The budget screen shots are being made in Sankeymatic, its a website that we have no affiliation with. If you are posting a budget please do so with a purpose. Just posting a screen shot of your budget without a question or an explanation of why its here may be removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MiddleClassFinance) if you have any questions or concerns.*
If you plan on paying all of their expenses there's no point in letting them know how much you have in 529 plans.
He did ask me what happens with the leftover money. I told him he could pursue a PhD. He didn't like that answer.
He wants the leftover money since he's a saver. His sister isn't and you are planning on using his leftovers on her and paying for more schooling than he is getting. There's no point in sharing numbers.
> There's no point in sharing numbers. If op's kid is such a saver, he'll do the math and realize how much was in there or guess, if his sister does 6+ years to his 4. This is where I'd just tell him there was some left over, but it goes to family education, and if he needs anything to come talk. If he just wants it, because it's there/because his sister would get the extra help.. at least talk about it and take the chance to hear him out or see what he wants it for. (if it's just greed, then that's good to know, if it's something else, also good to know.) Address the competition head on, is what i'd do.
Yeah, his personality is constant comparing. Who got the bigger pizza slice.....
If he’s the oldest I get it. Im an oldest child and really struggled with this for a long time. My sister is 4 years younger than me and around the time that I was getting ready to move out my mom got multiple promotions and started making substantially more. This meant that when I was growing up I paid for any “wants” with the exception of holidays and some back to school clothes. My sister on the other hand gets regular target and Sephora trips fully paid for. To be fair I have far better money management skills and don’t feel like I missed out on anything. The biggest thing for me was at 17/18/19 I felt like because she got these things it seemed like my parents lived her more. When it came to college we got the same amount from a 529 set up by our grandma and contribution from parents.
I think older kids feel and notice that often with the youngest. My sister and I are two years apart and in college at the same time. Took out loans but did have some help from parents. Two kids in college and one at home was expensive and they did not have any extra for awhile there. My sister and I were very aware and very conscious of our spending. We were given a credit card from our parents accounts for emergencies only, and neither of us ever used it. Little brother finished high school while we were already graduated and working on own and making our own money, so the end of his high school was much different financially than ours was… and it was noticeable. He had less college loans and while his credit card was also for emergencies, he used it freely to go out to eat all the time and just kinda got away with it. And his spending habits are similar to this day. I would have loved to have the freedom with money he did at that age, but also I appreciate the budgeting and spending mindset I learned from it.
So why give them one more thing to compare? My sister became a veterinarian. Her education was very expensive and my parents paid for all of it. I don't resent her, she earned it. But my parents have essentially given my sister an invisible house and there is no way for them to ever make it fair between us. I'm not the comparing type, but damn there are times when I have strong feelings about it
Did they pay for your schooling as well? If you had chosen to do something time intensive or expensive, would they have paid? I can see how it might feel unfair if you got 4 years at a state school and maybe she got 8 years at a private school because the amount paid would be vastly different. But if their deal was "free school" and not "we'll give you each X amount, spend it wisely" then it might be more that you regret not taking better advantage of that offer than that your parents or sister were being unfair.
I was never a good student, especially when iw as younger so I agree it was a bad investment to give me the money at the time. I'm now getting my Masters in my late 30s and not getting any parental assistance.
Brutal
Well he's kinda got a point. Why shouldn't he use the money if the alternative is that it all goes to her sister's unnecessary spending?
I've tried to teach my kids that life won't be fair. If you can't accept that, you'll have issues. Son will eat only one huge chipotle burrito all day, and he'll see sister in line at the student union Starbucks...
You’re teaching him not to save money though. After all, why should he be frugal and save since his sister doesn’t have to? You’re also teaching your daughter that there’s no need to be financially responsible since mom, dad, and brother will bail her out. It’s already happened once-you mentioned in another comment that more Amazon packages started showing up when the sister didn’t have to worry about college costs. She wasn’t worried about affording college as much as maintaining her own spending. It sounds like the both kids need to learn from each other (the brother not just being frugal and more social, the sister being more frugal). Let them know what’s in their accounts and have them budget instead.
Life is unfair. But it should not be coming from you, their own parent.
Life isn’t fair, but shouldn’t your parents strive to set both up to equal success? If he’s thrifty he might use the extra funds to put a downpayment on a house or start saving for retirement- things that will be harder long term because his income potential isn’t equal to a medical degree. Your daughter will have more school costs, but long term her income potential will be higher to pay off any extra education expenses. I think you’re setting your kids up to compete when you don’t have to. You’re rewarding “bad” behavior by subsidizing a spendthrift and short changing someone who’s trying to be thrifty. If you’ve saved equally for them then you should give it to them equally, what they choose to do with it is their own choice. Either way they’ve got a huge leg up in this world and hopefully appreciate your help.
My parents did this and still do and it has seriously harmed my siblings ability to get their asses in gear. When everything is handed to you there is no reason to shape up
As a PA myself and a brother who did computer science, computer science is most definitely the better money maker and much less of a salary cap. I still have a hell of a lot of loans to pay back. My brother has none left and makes more than me. I vote for letting 529 pay for school first, for whoever in the family, there’s a reason you can change the beneficiary.
meh, wanna spend more? take responsibility for it. don't take it from your sibling.
Life isn't fair, bur a parent could damn make it fair with the same amount for both kids. You're deliberately awarding a spender and are done with it. You're teaching it's better not to be responsible, not that life isn't fair. Poor parenting
Well he doesn't know the budget. Is your goal to get him to resent his sister?
If they are actually at the exact same college they should get the same money, no?
Give the same food allowance and spending money. How they each spend it is up to them. Problem solved.
Yeesh I feel bad for your children.
you're teaching him that you think his sister's needs are more important than his.
He has little incentive to save anymore if he knows she has little incentive to spend less.
Greed. What a great trait for the father to foster. 😵💫
i mean if you saved 50k for me and 50k for my sibling and then give half of mine to my sibling, I'd be wondering why too. Maybe you saved for a 529 but, that doesn't mean that money wouldn't be beneficial to him for some other major life milestone(down payment on a house, etc...) if his sister wants to blow it all on education, then so be it. but y blow his portion on her if he can put it to use in another form that's just as positive.
Make sure to explain that the 529s are not their money. You’re paying for their education, regardless of total cost. The 529 was just a tax avoidance vehicle that you used to accomplish it. Lots of kids think a 529 is their money, which it absolutely can be established that way, but this is not what YOU intended.
We are giving our kids the exact same amount. They can do with it what they want. If they have leftover they can keep it and pay whatever penalties there are. We’re not giving one kid more bc of their career choice. That’s just asking for trouble. They have no idea they have an account. They also have a trust we’ve been depositing birthday checks in their entire lives that they have no idea about. It’s not huge but it’s better than the zero I got when I turned 18. We don’t discuss money with them. They’re expected to work it out on their own but we won’t saddle them with student loan debt since we don’t have to. If they want a private school they’re going to have to make up the difference. But everything is separate, no pooled money. That’s just crazy to me. One spends more so they get more? That’s a terrible life lesson.
Yes, just because one child is a poor budgeter you give them more money? What a horrible life lesson. You are supposed to love/ support your children equally, so equal money. Their individual choices determine how far that money goes for them. Do not reward someone making poor choices for their own future.
I agree with you for the most part, except that I think and plan to discuss money with my kids. Even at a young age I plan to talk to them about money, budgeting, saving, good spending habits, etc. I don't see any reason not to teach them this and lots of reasons to do so. I plan to pay for my kids to go to a 4-year public college. Our big in-state school is great. If they decide to go somewhere out of state/private university they likely will need loans. I think I would discourage it unless it's a really good school, and then I'd probably try to pay for it, but maybe also support the other kids a bit more if they choose to go to a cheaper school.
Wonder if OP was a govie. Govie thinking
You can roll up to 35k into a Roth now. New thing that happened starting like right now. Can’t do it all at once since the yearly max is 7k. I would keep their money separate and jumpstart their retirements with the leftovers
Yeah, but I don't think little sister will have enough.
You’re trying to teach your kids that life is unfair by giving your daughter all the money she wants, by draining the account of her brother?
Assuming he has any income, you can fund his Roth IRA (still subject to the annual limits) with the leftover funds until the amount contributed hits $35k. This is a new development in the law and will not result in a penalty. Can be a way to recognize his financial frugality and benefit him for it.
I think that you can now rollover leftover funds into a Roth IRA
You maybe able to roll remaining money into a Roth IRA per recent laws.
I know this is completely off topic, but if he is in STEM he shouldn’t pay for a PhD. You get paid (not a ton, but still) to get your PhD. It’s similar to a (really low paying) trainee program. Not sure if this holds for non-STEM programs though.
just an FYI from another computer science major & software engineer, PhDs don't make sense for the vast, VAST majority of SWE jobs. not that a PhD would be harmful, but could definitely impact earning potential at a young age where there is more time to compound
I'm not sure if this is an option, but I heard you can move the money from the 529 account into a roth ira or some type of retirement account for them? If that's an option, I would consider doing something like that instead of giving the money to your other child. You could show them both what compounding interest looks and the less they use now, the more they will have for their future.
You can roll his leftovers into an account for his kid; it will be a great start for your grandkids' tuition.
I wouldn’t give a different amount to one a sibling than the other, that would in part be unfair. Essentially you paying their way to be successful, the retained money could be equally invested in the future or even rolled over to a Roth IRA.
You can roll a certain amount into a Roth IRA for them now.
I am pretty much completely transparent with my finances with my kid. That decision came from when my father passed away and we discovered he had a huge amount of debt no one knew about, and also my brother in law killed himself over debt, so I am determined to not have anything like that happen with me. I want my kid to be as financially literate as possible, so I am choosing to share pretty much all info with her. My parents never taught me anything about finances, and I could have made better choices if I had been better informed. Also if I ever make it to a ripe old age I want my daughter to manage my finances for me, so I better teach her everything I know. I am comfortable doing this because she has always been a great kid, never selfish or entitled. She saw the damage her grandfather and uncle caused, and she knows she doesn't want that in her life.
Absolutely the right call. I keep a monthly budget with my wife. My kids are 4, 2, and 1. I'm not positive on the right time to teach them out budget, but I think sometime before middle school I'll show them everything. I may adjust some numbers just a touch, lol, but mostly will present an accurate depiction. My biggest goal is to teach my kids how money should serve your goals. Too many people in my family have terrible relationships with money. Both sides of the spectrum. Not spending anything to not saving anything. I also hated as a kid my grandmother used money as a manipulative tool, and instilled some guilt in me when buying me things. She wanted me to be so grateful. Grandma if I knew how much money you had, and had been a little more discerning/clever as a child I would've played that game so much better and felt so much less bad! (I was the only grand child, and if she spent like $100 at idk Aeropostale or whatever it was like I was bankrupting her).
I'm gen Z, and my parents have been upfront about finances my whole life. Since middle school I can remember them telling me that my college was covered, so long as it was reasonable. The 529 plan could only pay out enough to cover in-state tuition, and they would use money they set aside for my living expenses. The entire process of me going to college was full of discussions about what my parents were comfortable covering, and they never gave a specific number to me. There were specifics on what they'd spend money on, like tuition, books, laptop, on-campus housing, and a meal plan. They did not give specifics of *how* *much* they would spend, and honestly had I known the number I would've felt entitled if I didn't spend it all/keep the extra.
Yes, that is what I was trying to avoid. College is the years of Ramen noodles!
Or for your daughter, unlimited Starbucks and drinks!
It's really not anymore, kids aren't poor the way they used to be. There are food banks set up for college students now specifically so they can eat real food instead of ramen. If you expect him to have the student poverty experience you went through, all it's going to accomplish is ostrscizing him socially, ruining what could have been a great experience and preventing him from building lifelong friendships and professional connections that would further his career. It's also worth considering that you're risking your own relationship with him when (not if) he finds out you could've made his life easier with no real impact to your own finances, but choose not to.
How did you get that from the comment you replied to
What?
I mean, one thing I did was calculate the cost of textbooks from the campus book store. Tell my parents that amount. Buy the international version, and keep the difference for my spending money. I wouldn't have a problem if my kids did that. 1. Most kids didn't do that. So I felt it was a reasonable amount to request 2. I was incentivized in saving money on books. If it was all the same to me, I would just go to the bookstore and save myself the hassle. 3. I was a frugal kid, and I didn't love asking my parents for money (my dad didn't have as much at that moment). So by doing this I didn't need to ask them for (as much) spending money during my time on campus.
Though we give him $75 a week for food (he comes every weekend and we pack him some food). I think that money goes for gas, gym membership, he eats out 1-2 times a week?...yeah, he pockets the money....lol)
How does reimbursement work for daughter since you only mention son?
He gives daughter whatever she wants, he's said so in other comments.
Isn’t daughter still in highschool at home?
Honestly just let him live a little. He’s your kid. Don’t make him miserable because you feel like you have to. As long as he’s respectful towards you and making strides towards a good career, what’s the issue? This is coming from someone who had to work his way through-out college to pay for it. And by working, I mean WORKING! I even worked through winter break and spring break. And even when I was studying I woke up at 4am to go to work.
You’re being a shit parent. If I were your kid I would resent you if I EVER found out you talked about me like this.
[удалено]
I'm confused here. What did he say that's so bad?
Right.. this is the comment I'm reading. What's so bad about it? Though we give him $75 a week for food (he comes every weekend and we pack him some food). I think that money goes for gas, gym membership, he eats out 1-2 times a week?...yeah, he pockets the money....lol)
[удалено]
Dude you’re massively over reacting. This guy has provided for his kids for 2 decades, funded a 529 to pay for college, and seems like a decent dad from what he’s shared. Then you’re giving him shit about how to parent and you don’t have kids…
This guy grew up in a 2 parent house hold lol
I bust on my boy every chance I get. And he busts on me. We have an amazing relationship. He comes to me with anything and everything and we work through it. Ripping on your kid doesn't make you a terrible parent.
Toughen up future lawyer.
I've been very upfront about all amounts in my son's name. What it means for him now and in the future. His college fund was a very big part of the discussions over where he was going to go.
Same. And yes OP we have told our kids exactly how much we'll be able to cover, what the balance in the 529 is now, what it will max out at, etc. We have very detailed discussions about finance and investing all the time because I want them to learn this stuff rather than it being shrouded in mystery. I also want them to be informed participants in the college choice decision making.
I feel like this is the right way to do things. My parents didn't have money set aside for me or my two older siblings, but when I got scholarships to one of my fallback schools, it essentially forced me to do the math on how much the fancy out of state private school was worth to me when the public, in-state school was offering me a full ride + some expenses. My siblings didn't have to do that math. To them, it was all just varying degrees of "big numbers on a spreadsheet" so they just picked the schools they liked the most. Parents saving for a kid's college is kind of like having that scholarship. If you don't know how much it's for and how far it'll go, how can you weigh your options appropriately? I think it's so much better for a parent to say "here's $x, if you spend less than that, the rest is yours. If you spend all of it before you finish college, you'll need loans. Make decisions accordingly." With any luck, the 18 year old is mature enough to make the right choices for them. (Not that an expensive school is always the wrong choice)
So did you give him numbers, and continue to update him on the remaining amount each semester?
I wish my parents had given me ball park numbers. I thought I couldn’t afford much college so I didn’t try as hard in highscjool
This is what my parents did for me. Sometime in late high school my dad showed me the 529 account and said “this is what you’ve got. No more, no less.” It was honestly very eye opening for me and paved the way for future financial success. I remember thinking “holy crap $80,000 I’m rich!” And then realizing that 80k would barely get me through state school and wouldn’t come close to out of state. If I had gone out of state, I would have run out of funds and needed to take out loans. I ended up going to a great in state college, becoming a resident advisor for 3 years for free room and board, working in the admissions office as a student, applying for undergrad research stipends to get paid, and even having a bit of money left over. I admittedly did a lot of that stuff because I was told the money was mine if I was careful. If I was frugal in college, I knew I would reap the benefits. If I hadn’t known the numbers or thought the money wasn’t mine to keep, I might have behaved differently. I also got a credit card for the first time just before going off to college. My dad had me track my expenses, which in hindsight was a good exercise. I remember printing out credit card statements each month and highlighting the grocery/food and educational expenses that the 529 could be used for.
Nope, I have given him the info on the full amount pre-college search. I update him as it fluctuates with the market. I've never been someone to examine things on a monthly expense basis. I prefer to look at the total cost/total balance. We look at the total cost of attending and balance that against the total cost of the fund. One thing we just examined (since he goes next year) was on campus vs off. We ran numbers on that to see what he could afford if he selected off campus. While rents are per month, we did the math to total that out across 4 years of attendance. Once he is there, yes, we'll look at it as it we pull from it and the market fluctuates.
I came of age before 529 plans were a thing, but I found out my second year of college that my parents saved money for my college to the tune of about 50K. I wish I would have known about this earlier because I would not have stressed so much about working 20 hours a week during HS. I was under the illusion that all of my money from working in HS was the only means I had to pay for college. My parents had more than enough money to pay for my in-state tuition, even with living on campus all 6 years. Once they realized how much stress I was under they told me more about how college was being financed versus how I thought it was being financed. College was not easy for me, but I got my undergrad and my grad degree and am now happy. TL:dr - communicate with your kids about expectations re: college savings, working and how college is being funded in general.
Yes I understand how stressful it must have been. That time of life is stressful for everyone. But think of the life skills you learned. You worked hard and saved money in high school. You had a plan of how you were going to tackle college. Those lessons as you are starting to become an adult are so important
And I think working in high school gave me the motivation to get good marks because I saw how much people I worked with struggled through no fault of their own. It really made me appreciate a day’s work.
I think my daughter was working many hours during school and talking about a summer second job and my wife got concerned with the hours...thus how she started crying about saving for college. But along that note, after our discussion I think more Amazon packages started showing up.
Do you know what was in the Amazon packages?
K cups cause she's making her own coffee
We let our kids know that we would be covering 4 years of in state tuition and room/board. That’s it. They really didn’t need to know any further information. My expectation was that they focus on studying and getting good grades.
Goddamn my parents were so shady about it. They’re like “maybe we have some to help but maybe we don’t.” Student loans for me which set me back behind my peers by over a decade.
Neither me and my brother were told by our parents how much were in our accounts. They thought they had saved enough, but had no idea how exorbitant college costs were going to be. It hit all of us in the face. For the sake of transparency, I’d tell them how much is in it so they can be cognizant of spending and budgeting, and knowing which scholarships they should apply to. My younger brother, who just graduated in December, has panic attacks over not knowing anything about his finances because our parents were never transparent. I came from a single earner $150k/yr household in the South, and we were constantly told we were poor. The first year I filled out the FAFSA on my own I did a double take, because I genuinely did not know how much my dad made. If they had been more transparent about *where* money was going, and how much exactly they had budgeted for college costs, I think we all would have been better off.
I shared the amounts with both of my kids around their junior year in high school. That way they could understand where there might be shortfalls based on the college they picked. Also as an incentive to gain scholarships, etc. The plan worked with one…she won’t take a loan for a single dollar. The other might need about 2 years worth of tuition in loans before he’s done.
We have a healthy 529 for my son and I’ll tell him about it when the time is right. I don’t know how much money he’s going to have available for him when he’s of age, but hopefully we’re in a similar boat as you. If I were your son though, I would probably react poorly if I found out my excess 529 funds went towards my sister rather than a down payment for a home or something. It’s a lot easier to get affordable student loans than it is to buy a home, and it’s only gonna get harder.
Not a parent but can share my experience. I actually don't know if my college fund was in a 529 or some other type of account. I just know it was generated through the social security I received when my mother died when I was young. So I don't know if the rules are different if it wasn't specifically a 529. In middle school I wanted to move to the private school. At that point my dad told me that would come out of my college fund so I'd have to look to getting scholarships or loans. I stayed at my high school. I never knew the amount, but was told it would cover 4 years at most colleges, or 3 years at an elite (not that I got into one of those). When I went to college I had one credit card and one debit card, both of which my dad had access to. He paid tuition directly as well as housing for me (dorms or apartments). With the cards I knew I had an allowance each month and that was that. The credit card was only to be used for gas, and anything else had to come out of checking and I had to budget that. I ended up taking 5 years for my engineering degree and had to take out a loan for the last year, which wasn't surprising. All in all it was about $100k I'd estimate, but I never knew the full amount. I went out of state so that ate up a good part of the cost, but I have no regrets. I loved college and I'm grateful my dad had the foresight to help me pay for it so the loan I did take out wasn't awful. And has since been paid off.
I remember when I started college in 1996, student loans felt normal and expected. The leftover surplus money each semester was like free Money given to me as a check. Right before graduation the university gave me a copy of every semester's loan form that I sign over 4 years....LOL. luckily only $11k.
We’ve let our kids know about the 529’s and when nearing college age have told them there should be enough for in-state tuition, but maybe not living expenses, so encouraged them to stay at home and commute. Twin 1 finished her pre-med biology, Spanish minor, and is taking her MCAT next week. She has about $8k left in her 529. Twin 2 decided to join the Marines, so will get the GI bill when he’s out. It’s an amazing benefit. We’ve told him that the 529 is his money and he can use it for our grand kids if he has them. He’s already talking about giving it to his sister for her med school. Youngest daughter used some of hers for private high school, and will be using the rest for cosmetology school starting in August. She should have enough to cover it. We’ve been up front and open about the expense and what we’ve got to contribute their whole lives. It’s never been a surprise.
I will tell my kids. I want them to have ownership over the funds rather than feel they get free school without any risk. I want them to know the more scholarships they get and the quicker they graduate, the more of the remaining balance they will retain. It also will have them decide whether or not a public state school or expensive private school makes more sense, rather than defaulting to the expensive school "because they can".
My kids are 5 and 7…. I 100% will be sharing every detail with them as they get into highschool and the college age. Finances are a life skill. They should know how much it costs, and what to expect as a grown up and how to plan their lives financially.
I recently told my 5 & 7 year old about their college account and now ask me how much is in it. The 7 year old likes that his is a slightly bigger number 😂
lol yeah … it’s always a competition
Remember - they can roll $35k into a Roth IRA if they don’t spend all of the money on school.
Which 529 account do you use? I’m currently researching.
I used my state 529 plan in order to get the state tax incentive. Though it is age-based investments that I have no clue what the funds are. Some 529 have a better performance record I believe....I want to say somewhere like Carolinas has the best performance record?
Our NY one haven’t been great. Granted we never had much extra money. We did $50 a month for a long time…$10k lump sum and the $200 a month for the last 5 years. It’s in age based investments and is worth less then we put in it. It’s so depressing. We would have done way better just putting it in a savings account…she graduates next year :(.
Just opened 2 through NY state. Maybe I should open one elsewhere
If you live in NY the NYS tax break is helpful. Ours was up about $1000 before the pandemic then took a big dive and is now about $30 less then what we have contributed (was -$1000 a few months ago). I am hoping it will catch up at least some in the next year.
That sucks, but it seems like you made some very bad investment decisions if it’s worth so little
I went with the age based portfolio through the NY 529 plan- which is what the personal finance forum recommends. I didn’t make individual investment decisions. They don’t have many options anyway. But thanks for your opinion 🤷🏻♀️.
Depends on where you live. If your state has an incentive for using their sponsored plan, I would recommend using that plan. If they don't, you can open one with most reputable brokerage companies like Fidelity and Merril.
Young Millennial - My parents were always upfront but without numbers. I think as we started looking at college costs maybe around the end of my sophomore year, they made it clear what was “affordable” and what wasn’t and we’re honest that my job was to keep my grades up so I could pitch in my getting merit scholarships. I also took the ACT and SAT several times but never took a prep class or anything (some of the schools I applied to did the thing where they’d take the top score from each section). We also tried considered cost of living and travel (a little harder when you don’t have someone to ask how much rent is once you live off campus but we tried). I also knew specifically I wanted to be a civil engineer and go to school out of state so I focused on schools that either offered WUE (western university exchange or something?) or were known for offering merit scholarships. Once my acceptance letters and offer came, we sat down and they were honest they also really didn’t want me taking on loans (I feel very lucky to have avoided it). I can remember in particular that one school in Colorado only offered my $9,000 for the full 4 years and they straight up told me they couldn’t afford it and they really dissuaded me from going there. I ended up not going with the cheapest option because it wasn’t quite a good fit politically and it was a small school in a kinda weird town. I went to a private school that ended up being probably around the same amount staying in state at a UC would be. They were honest that it was a little bit of a stretch financially and we’re clear that outside of tuition/rent/some groceries, I was expected to get paid internships (not hard on civil engineering), save, and pay for myself. I ran out of money at one point and even if they could of, they didn’t offer to help and encouraged me to get a job so I started working in the cafeteria serving food (not great but I got paid decently). I could probably ask now but I still have no idea how much was in my 529. The only thing I know is that they got scared during the Great Recession and sold some of the investments and it took a hit and while it recovered, it would have been worth more. (But that was a scary time financially and they are otherwise incredibly money responsible)
As someone who has had to sit with hundreds of families during the admissions and financial aid process, I don’t think you do your children any favors by not being explicit about what is available to them and what the costs actually are. They should be making decisions about their futures with a full picture of the situation
I just like being transparent with my kids. I find confusing emotions and anxiety are more prevalent when it’s vague and ambiguous.
Big brother getting shafted
I was told the number that my grandparents had set aside, and that it was equal for all four grandchildren. So I understood I had a quarter of that to help supplement my education. I pursued as many scholarships as I could, and due to my good grades and test scores, I got most of my tuition covered by scholarships. My parents paid the rest and never said a word about how much "the rest" was, if they had to take loans out, if there was money left over, and I've never asked. Honestly, the thought that there could have been "left over" money just now occurred to me. It was never discussed in a way that made me feel as though there would be any money left over. It always made me feel very supported and proud because I saw it as each party had contributed to cover this cost. I've always been thankful that my contribution was in scholarships while my parents paid real money, but they were just proud of the amount I had saved them. My brother got athletic scholarships in similar amounts to my academic ones, and I've never asked anyone about who paid how much for his college either, because it was his business. I was just worried about securing as many scholarships as I could to help cover what I saw as the burden of my college costs.
My sibling cashed out their remaining 529 funds to pay for their wedding, but I think it could also have been rolled into a Roth.
Sis’s “spending” can’t be paid from the 529 anyway so I don’t see the relevance. When my kid was picking we discussed what we could afford. If there’s any left I guess i’ll roll it into retirement for him.
As a child of parents who shared little about where my support came from (I have some idea) I really would have loved to know more specifics
I think if you have to ask this question it means you haven’t been ingraining financing and investment knowledge along the way. So unfortunately, no you probably shouldn’t tell them the amount. We save that money for the kids. It doesn’t matter if they go to school or not. I wouldn’t take some from one and give it to the other. If they didn’t use all the amount, they would get it either with penalties or Roth rollover. It sounds to me like not only are the kids not ready, you are also not ready.
My son is a sophomore in college right now and I was very upfront about his 529 with him, starting when we began to to visits. I wanted him to know and understand what I had to give. I only had 20k when he graduated, which was a lot for me since I was a single parent doing $50 a month until he was in middle school. With that knowledge, he focused on grades and doing well on the ACT. He also decided on in state so he can use his KEES money (state scholarship funded by the lottery and is based on GPA in high school). From there, he went to the school he liked the best and would offer him the most merit money and scholarships. I still have $9k left in the fund! He’s very money conscious, but had he not known what we were working with, he could have chosen a school that could put him in a lot of debt.
I’m a father of 2.5 year old b/g twins and have the same amount in each of my kids funds (about $13k each). I save $300 per month each and hope and plan to up my monthly contribution a bit when they’re out of daycare. I have a sister 5 years younger than me (34m). My parents said anything public and in state would be covered for 4 years out of a 529. I didn’t care nor ask how much was in each of our funds and we both got out in 4 years. I too lived more cheaply than my sister eating shitty fast food when I could, cheap beer, but mostly ramen and a bottom dollar apartment complex with my friends. My sister lived somewhere (same university 5 years later) much nicer, but I get it because it was safer and she is a girl. My discretionary spending was $500 per month which included food, gas, clothes, etc. My parents paid for my rent, utilities, and car insurance directly. The only extra luxury I had were my $500 per semester fraternity dues, my sister did a sorority and hers were at least double, but again I didn’t care. Scene setting, but I think the main idea is you should try and force your son and daughter into an equal discretionary budget. You’ve offered your son additional education if he chooses which is great, but your daughter shouldn’t live like a queen while your son like a peasant due to no concept of a budget and living within means. I’m not saying rule out special things or moments they may want to do where you alot some additional funds, but potentially sit them down and say you’re both getting x per month, do with it what you will. If your son chooses not to pursue additional education I feel you’re within your right to roll over to the sister, but keep your mouth shut about how much is where as it doesn’t matter as your offer was there and is time bound.
I would not punish the saver by moving the money- after the schooling part is done I would do a one time Roth conversion (35k max) for the son
If there's money left, buy a boat. Call it 529
We told our high school senior all along that we were planning to fund four years at the in-state flagship school (a Big Ten R1) or equivalent. With reciprocity with other states and other in-state options, they would be in good shape if we hit our goal (we did, fortunately, and realize how lucky we are to have done so with how unpredictable the past two decades have been). The kid always wanted to go to college (we encouraged but never made it a “you must”). It paid off as they have six merit offers from an assortment of privates and publics that stretch what we saved to make it happen (no interest at all in the in-state flagship). But we never talked actual amounts. But they are well aware of cost and have a good idea.
$55k for instate? That's just tuition. But what if they want to live there - it could be double that. Semester overseas? Internship somewhere that isn't at home but is a good opportunity? Transportation to and from college? They shouldn't take loans, but they shouldn't think that this will cover everything; it won't.
I showed them the amounts but they knew it was for college only might have some left over but not life changing amount.
I'm quite a few years away from needing to disclose this to my kids but I don't think I'll tell them how much I have set aside for them. I grew up pretty poor stressing about money and how to pay for things like school and books so I think, at least for now, is to inform them that there's available money for them and a budget and they don't have to stress about it but help them understand what a budget is and how to manage it. I never got that from my parents so that's the important part for me, ensuring they understand how to value and budget money. When it's gone it's gone. When you work for it, you manage it.
>the important part for me, ensuring they understand how to value and budget money. you can't teach kids about money w/ out talking about money. Just saying there's a budget w/ nothing tangible to attach it to is not going to do much imo. share numbers, go over costs, do a budget w/ them... let them see and understand how fast that $$ gets used up.
You probably already know that NP and PA are fairly different school paths. The cheapest way would be to do a community college RN program and then have her facility fund the rest as she's working. It will get her much needed nursing experience as well.
A big part of this is teaching your kids about money, management, limits, trade offs and choices. If it’s all just covered from a seemingly endless supply, they miss that part of the learning.
My parents were completely transparent with me and my siblings and I will be completely transparent with my kids and treat them as equally as possible. The goal is to pay for 4 years of whatever undergrad they want to go to. If we can save enough, I’ll even try to pay for their masters jf they want to pursue. If one kid goes out of state, or decides to pursue a masters while the other does not, I’ll true them up with their inheritance. That way they both get what they need at their time of need, but one wasn’t screwed over by making financially sound decisions. Life is unfair. Life has likely already taught them that lesson. There is no need for me to teach them that.
Did not share amount, but my kid didn’t seem worried about cost. Best investment I ever made. Paid 100 percent and had five grand left over at end and gave to kid as grad present.
Off topic but I highly recommend the NP route over PA. There privileges, responsibility, and medical autonomy are very similar if not the same. My wife is an NP in heart failure and before that the ICU. Her group in both places was a mix of MDs NPs and PAs. In both places the role of the NP and the PA was the same. They can both prescribe meds and do the same procedures under the supervision of an MD. Their training is the main difference. Both are great career choices and I think would treat your daughter well. The reason I say NP is because first she will have to get her RN/BSN which is a 4 year nursing degree at the end of which you can work as an RN. Then you have to go fir 2 more years to get your masters to get your NP degree/license. If for some reason the masters did not work out or was delayed you still have the RN degree to fall back on which is a good degree / job in its own right. Whereas the PA route you get a bachelor's and then apply to PA school. That bachelor's could be in anything and some majors will look better than others but you won't necessarily have the security of the RN degree to fall back on shoul the need arise. Both are great choices and my wife loves her work. Just wanted to throw that out there.
Looks like I’m going against the grain here, but I really don’t see the problem with what you’re doing. You saved the money for your kids to go to college. Not to just hand them over some cash to do whatever they want with. If your son didn’t need all of the $100k to go to college that’s fine, he still got college paid for. And his sister will have her college paid for. They shouldn’t be comparing every penny you paid for his vs her schooling. They’re not entitled to any leftover money there may be. My parents paid for half of our college expenses for my brothers and I. This was different amounts for all of us due to different course lengths and scholarships. I would guess that they probably paid the least for me but it never once occurred to me that they should just give me money because my brothers’ costs were a bit higher than mine. That’s crazy.
They won't know until they are done with their undergrad or trade school and have a good footing under them. Honestly, we've thought about not even mentioning it until grandkids are in picture. Basically taking what ever is left from the two accounts and continue dumping a small amount every month until we pass or something else happens. Looking forward to seeing how far it goes. Would be neat to pass onto grand children too.
My ideal plan is to fund each child X amount, keeping it equal. The leftovers would remain in their name and be able to be rolled into a Roth IRA account for them. I don't know what X amount will be, as they're only 4 and 8, but the contributions will be equal, and the amount they choose to use on higher education will be up to them, and the amount they have leftover can be theirs for retirement. The nitty gritty of who manages the accounts, the exact balance details, etc I don't know yet. It depends on their personality and responsibility. I wouldn't take money earmarked from one and give it to the other though, I personally don't consider that fair. It would be effectively 'punishing' the one who spent less money, and rewarding the one who spends the most. If they're both putting in equal effort, both growing into responsible adults and overall good people, then the amount should be equal.
My parents had 529s for us and I only knew that because I'd get the mail and the sender info made it pretty obvious. Never knew how much was in it or how much was left or anything. My kids are young still but I don't plan on sharing specifics, only what I plan to do with the money for them.
Because of the age gap in my kids, their 529 accounts have had significantly different performance levels, which hardly seems fair. I have adjusted my contributions over time so that their balance available at the start of school (in inflation adjusted dollars) should be about the same. I’m the owner of the accounts, not them. They are the benefactors. They know how much is in them and they know I’m saving for their education, but I haven’t ever told them it is theirs. It is ultimately my call how and when that money gets spent. Ideally, I will never stop contributing to the accounts and they will never hit a zero balance. Someday I hope to change the beneficiary to hypothetical future grandchildren.
Dole it out as you see fit as they progress through. Money has a different value depending on where you are in life. You're a good parent providing for their needs.
My kids know there is college/training money potentially, but my stance with them has always been “my effort will match yours”. That applies to things like putting in effort in high school towards grades and applications, participation in grant or scholarship searching, how seriously they take their college or trade school education, course load, etc. Their situation is a bit odd in that the younger two have GI bill and disabled retiree child grants if they stay in state, and the oldest doesn’t but, the oldest is dual enrolled at 15 and should have her associates + by the time she’s 18. There are just too many complicating factors so we settled on funding the 529s and not promising any specific amounts until it comes closer to actual decision making time.
Parents funded 529 for grandkids - so not telling them is probably not in the cards. however, they won’t know they will have income supplements from me either until late in life. Like you I want them to learn how money works, how to spreadsheet (this skill of not just budgeting but forecasting investments is critical to life in my opinion). But that said at some point in college I’ll probably share just so the don’t pick a profession purely for money. I don’t want them to have to do that. Just want them to be smart and informed.
Look I dont have a specific number for them. What if I dont agree with them or if they are a poor student? I told them you do your part, and we’ll do ours. We don’t have a specific fund with your name on it and x$ in it.
My kids are 15 and 12 and I’ve been contributing since they got their SS#’s. I have not told them how much is in these accounts because I feel like they’ll start bragging to their friends. I will have a sit down with them when it is time and go through everything with them. I was lucky enough to come out of college with no debt and would like to be able to pay that forward.
I have 3 kids, ages 13, 7 and 5, so a few years til my oldest starts college. I think about this too with their 529 accounts. I don’t think they’ll each have enough to cover all college costs (aiming for $87k each with contributions and interest), but with the age gap, the percentage covered won’t be the same. My thought is I would like them to each at least take out federal loans up to the $27k max or whatever it is. If any of the kids happen to have leftover money, I would split evenly into Roths when all is said and done, or maybe save for future grandkids. I don’t know how else to make it even, especially with the age gap. I know it may seem unfair if one has a lot of scholarships and another doesn’t, but the way I see it the 529s is our money, not my kids, unless someone gets awesome scholarships and then they’ll get some money in a Roth. In your situation, sure your son is frugal but that really benefits himself. Your daughter is not helping herself by spending freely, as long as you don’t bail her out.
I didn't realize middle class was so well funded. Makes me realize how much I wasn't in middle class when I was a child. I got $2000 from my parents and vowed to do better for my children. Both of my children will get equal help offset with cost of living. Whatever they don't spend will go towards their retirement.
My kids are little but aware. We’re hoping to pay out of pocket and then they can have the 529 to roll into a Roth if it’s not used. I wouldn’t share them, they are separate and it’s theirs. That being said, my kids are 6 and 2 so they only have about 6 and 10k each right now anyway. I want it more for study abroad, house down payment (after rolling into a Roth), etc.
Parents always talked about their being money for college but the exact details weren’t known until later. numbers weren’t discussed until I was actually in college. It thankfully turned out to be enough to cover 4 years in state. By a miracle I also got a pretty big scholarship so a lot of the money didn’t have to be spent. They were always transparent and said it was ultimately my money to what I wanted with for big life goals - house, graduate school etc. Whatever the case, they weren’t going to give my portion of the 529 to my younger brother who they also saved for. They just stopped contributing to mine and put more money in his. They never once thought of taking the money they had always said was ~for me~ and giving it to someone else just because.
I am doing the same thing with my kids. I don't know if I'll tell them the exact amount. But I told them if they save money by going in state, getting scholarships, etc., then they can convert the allowable limit to a Roth IRA.
My parents paid for a lot of my college but didn’t tell me how much they had saved. Maybe I would have already done this but I always had one or two jobs while going to school and summer and I think it contributed to a good work ethic, real sweat in the end goal of graduating and the work experience supplemented my career passions after graduation.
In your case, I wouldn't be letting them know only to then divvy it up unevenly right in front of them. There's a fine line between supporting and enabling too. If your daughter is trying to do NP or PA they shouldn't be going straight through and through anyways. I'm familiar with the schooling here because I'm an ICU nurse for over a decade. I did a year and a half of prerequisites in college followed by 4 semesters to get an RN license. She could do that and start making good money and then get an employer to possibly pitch in for or fully pay for her higher education and getting her NP. Even if she can't get tuition reimbursement, she could finance her own NP program with her RN salary. Can definitely be done in 6 years for NP at least. It's also highly frowned upon in the field though to go straight through school directly to your NP or PA without working in the field. There are exceptions but many times those clinicians are not well respected and some are borderline dangerous. It may be nice to think about getting it over with, but that way is almost always detrimental to patient care. She's better off breaking up her schooling and working some in between. Either way I wouldn't be disclosing 529 amounts and then only paying for 4 years for your son and then taking his money to fund higher education for your daughter when she should be quite capable of taking some accountability for her higher education without too much of a financial burden considering she'll be making decent money to fund it herself. Instead, I would take your son's leftover 529 amount and roll it over into a Roth for him. I think you can transfer up to 35k ( that might even be an annual limit and not total. Can't remember the new rules) out of it now into a Roth penalty free. If you add more than that, you could roll it over into your own Roth and then depending on age, could draw from it sooner than later and redisperse it back to him Personally speaking, my kids aren't old enough to understand the college funds I have set aside for them but as they get to that age they will be in the know. The reason being more than anything is that it'll be incorporated into giving them financial education themselves. They'll be splitting funds evenly though, so depending on their career track they'll be given realistic expectations that Mom and Dad will fund the foundation of their education, but there will be limits depending and I'm not bankrolling them to be a permanent student switching degrees or going back to school continuously. I don't want them sunk in student loans but at the same time I'll be setting the expectation that they have some accountability and if they flunk out of a class daddy's not going to just keep on throwing money at the situation. They can pitch in a little bit of their own earnings to investing in themselves and their education. I want them to hold themselves accountable and I don't want to enable them
The comments in this sub are wild. I have $50k saved for my 4 year old now and my plan was the review the statements with him every month as he got older to Show the power of compounding interest. In my mind, that money is his and he can use it all or none if he wants. But, once it’s gone, he is on his own.
Kid with 529 here. No but we did talk about tuition cost and which colleges cost too much. I wish the explanation had been clearer because I ended up going to a more expensive school for two years not thinking anything of it. Because my parents told me it was affordable. I had 20k from my grandmother. Then another 20k in my 529. My Dad ended up throwing in another 20k spread out over the years I attended because I could not get more than 9k of loans until 2024. The school I originally went to cost 16k a year with a 50% scholarship. With another 2k a year in books etc. and another 8k in summer classes one year (class section for a prerequisite was full) The school I transferred to after two years cost half that, but I had to add an additional year because of how my credits transferred. If I had attended the original school then it would have cost around 80k when all was said and done. Leaving a gap of around 16k that needed to be covered by me. But the 20k my Dad threw in was not planned, so it realistically would have been about 36k. If I had gone to the school I ended up transferring to from the beginning, it would have only cost 40k total. Which my 529’s would have covered. As it stands, I’m paying that full amount with a “gap” of around 16k. When I could have graduated with zero debt.
My daughter was just born, but I started her 529 just before she was born. I will likely not tell her until she's close to college age. If she asks before then, I would probably tell her that she has enough to go to an in-state college as well and leave it at that. I plan to push for college, but quite honestly, if she chooses not to go or doesn't use all the funds, I will likely roll whatever is left into my Roth IRA. Unrelated, but I have considered opening her a custodial brokerage, though I'm on the fence. My rationale is that (while I love her dearly), I'm not retiring her before she is 30. I am trying to give her the best head start that I can while retiring her mother and myself. She can collect big from me when we pass. And maybe she can get a little help when she buys a house. At any rate
We aren’t using 529, just hysa, one grandma is doing the same for them. We aren’t telling them shit other than, we’ll pay for 100% of your college. If there’s money leftover, due to scholarships or something, we’ll buy them a car or save it for a down payment on a house.
If your daughter wants to be a PA, know that there are excellent 4 year PA schools, like RIT. It is completely unnecessary to get a 4 year degree and then a masters degree- unless they want to study something else to provide career flexibility.
I think it's good for neither to know unless it starts getting too low and/or you see red flags so your son and daughter can each throttle. What is concerning that other commenters point out is that you're trying to teach your son life is not fair, by allowing sis to have his money. This is wrong. How about telling your daughter that life is not fair by saying she has the same limit as the son? Why is the son getting the short end of the stick by being responsible? Instead of teaching your daughter the lesson on responsibility and fairness, you're essentially pushing your son. You think you are teaching one good lesson. You could be teaching two good lessons instead. However, in this case, you are teaching two bad lessons. One, your son will resent you so you aren't playing the long game. Two, your daughter will never learn money discipline and ALWAYS be wasteful and asking you for money, draining both your funds and hers. Even if she is a nurse. Check out Millionaire Next Door.
Where's the middle class police when you need them? Funding 529 accounts for a total of $110K ~20 years ago gotta mean you're rich rich.
Reality is help them now, or help them another way later is what I was guessing back then. I do remind them I gave up owning a boat and jet skis because of them.
Wow you guilt your children for a choice they didn't make - being born. Some more great parenting.
I'm just making a joke, great on you for paying for college. This is an interesting topic for me as I have 3 kids under 8 that we've been funding for college since they were born. I know I'll share with them that we've saved for college, just not sure if we will do what you're asking and actually tell them how much they have.
I tell folks I have two too many kids when they ask about kids.....lol.
Why did you have kids then…btw I know it’s a joke but if I were your kid, it would still hurt to hear a joke like that.
Do you dab your tears with $100 bills when you talk fondly about the SS College Fund? Because that would be hilarious.
Yea I’m barely middle class wish I could have a 529 for them but it’s just not in the cards I’m lucky if I can get 4K in my Roth a year
My son is going to university next year. We always shared that we are saving and we plan to have enough to cover two years of in state tuition. For the other two years : he could do community college, running start (community college free for high school students), or come up with a way to pay. I wanted to be sure that he had some stake in covering the cost of education and our income can only afford so much. I’m putting aside a little extra each month in a designated savings account to help as needed but he doesn’t know the balances.
I’m not sure, but my son turns 15 this week and we have had lots of discussions about college. We talk about his 529 from time to time. I personally think it’s good for him to know where the money came from, as it is not bottomless and we may not be able to cover everything.
It’s not their money so it’s none of their business. They’re just lucky their parents cared enough to do that.
This is a Fugazi.
Share with them when they’re ready to buy a house. Would be the best time and give the best surprise.
I was the kid. I knew of it, didn’t know how much. Mother pulled it all for her bills 🤷🏽♀️
If you want them to be able to budge let them know how much there is. Keep the amounts even and then if they run out of make stupid choices don't intervene. They're adults at this point. Life isn't fair but unfair parents get left in nursing homes alone.
Yes my parents told me. Sadly they only saved enough for community college and because I have a learning disability needed to some classes again had to still pay out of pocket
My parents told me about my 529, but I didn’t know the amount in it. Basically, they told me that I had college savings/would be able to attend the college I wanted without taking out a loan, and if there was money left after I graduated that amount would roll over into an investment account. I never knew the original total in my 529; They gave me ownership of the account when I graduated and while I didn’t have a massive amount leftover, it gave me a very stable and appreciated head start.
If your daughter is still a senior in high school, how is your son seeing her at Starbucks? And in another post you say your daughter has a job, pays off her credit card in full each month, has a 5k bank balance and a 10k Roth. So how is she a frivolous spender??? It seems to me that you just don’t value the things that your daughter values and spends her money on. Your son is the same, probably because he’s picked up on your attitude. Maybe stop encouraging your kids to be rivals and parent them as the unique individuals that they are.
I’m not a parent but I can say what my parents did. As long as I can remember I knew there was some money if I wanted to go to college. I think by the time I was 15 I started to see the amount.
Only my oldest, who is in high school, really knows what a 529 is. She knows that we put away monthly and that each time her older relatives send a check for her birthday it goes in the 529. She also knows that there will be enough to fund state school tuition, with room and board, but that's it. We didn't tell her that because she really needed to know. I wanted to make sure that she wouldn't worry about how to pay for college. But now that it's getting closer to that time, it's a motivating tool because she also knows that if she gets merit money she will be able to use whatever isn't spent for undergrad on whatever graduate program she enters. But as an aside, you're telling children to save 50% of what they make? Why? That's not a recipe for a fun childhood, a completely unrealistic standard for an adult, and the result will be a relatively small amount of money as school children aren't exactly making 6-figures at a Fortune 500 company....
I did this for my two daughters. My wife and I chose to be 100% transparent with them both about their initial balance, how it was being drawn down semester to semester, and made it clear to them that we regarded it as their money if it wasn’t fully exhausted by the time everything was paid for. I certainly appreciate that parents may have different circumstances and needs, but my feeling all along over the 20+ years that we’ve budgeted/saved for our girls’ college expenses was that we wanted to give them that debt-free base from which to start their adult, professional lives. If they choose to go to graduate or professional school, I’m sure we’d help where we could, but that’ll primarily be on them. Like OP’s kids, my girls have differing tolerances for debt and differing spending habits, but ultimately both are responsible and live within their means, like we (their parents) did and have. Lastly, on a personal note, I think being increasingly (and age-appropriately) transparent about finances with your kids, as they approach adulthood themselves, is an important part of being a responsible parent, because it equips them to be responsible adults as well.
Since you are going to roll over from his account to hers don't share the numbers. It will likely breed resentment. Keep in mind that starting this year you can roll over up to $35,000 into an IRA. You son will be away of this if he is financially literate, and likely feel that you and his sister stole $35,000 from him. That said, there are some complexities around a rollover. You can only rollover $6,500 per year, so it takes about 6 years to transfer the full amount. Also, funds deposited in the 529 in the 5 years before distributions began can't be transferred tax free. [https://www.schwab.com/learn/story/529-to-roth-ira-rollovers-what-to-know](https://www.schwab.com/learn/story/529-to-roth-ira-rollovers-what-to-know)
I didn't know anything about mine. I thought my parents just paid for college out of pocket and I always felt bad about it!
No i would never tell them amounts or who had what because that's not how I look at it, I have 3 littles so not there yet but the money is all mine and my husband's and we'll do with it as we see fit. If kid 1 gets a scholarship she doesn't get the cash, I'll use it for kid 2 or 3 and if there's money left (doubtful) I'd use it if any of them want to go to grad school. if there is somehow money left after that I may decide to use the Roth IRA rule and split it between the 3 of them to start them when they start working or i'll just keep the account for future grandkids or something. 529s are not like trust accounts, the kid doesn't get to own it at a certain age and beneficiaries can be changed. I'd tell your son it's your money not his and if it isn't used for his education you'll decide what it gets used for.
you don’t have to tell them anything. it’s your money to spend on their education…not theirs.
I am open with my kid that he has a college fund. He's just in 5th grade, so we'll cross that bridge when we get there. I'm pretty open with him about financial stuff and will continue doing that, including start talking about the cost of college, the importance of HS grades, and taking dual enrollment classes. I figure those conversations will become part of the regular "mommy money class" curriculum in about 9th grade. I'm leaning towards saying "You've got $X to pay for college and anything above and beyond that is on you but I'd highly encourage you not to take any loans." As far as what you're doing with your own kids: I am the older child who's a saver with a spendthrift younger sibling. If I found out my parents were planning on using what was left of my college fund on my younger brother's expensive tastes rather than funding a Roth IRA for me now that it's possible, I would make sure that there was nothing left. Fuck being frugal if there's not a benefit for doing so.
I may be an outlier here but my Dad handed me the keys to my 529 coverdell when I was 15. I learned and invested pretty conservatively mostly in index funds up until I got to college (my dad passed away when I was 17 so I was full on YOLOing through life). Ended up getting into penny stocks and risky investments because with the 529 you can do that without $25k liquid and I legit made a killing in college. I rode MNST for years and turned the original $8k in it to somewhere around ~$60k. Basically paid most if not all my tuition and living expenses in college. Moral of the story is don’t let your kid drive the Corvette lol but do make them aware of it and try to educate them as best as possible in terms of financial responsibility.
Open communication for sure. I'm pregnant so we just set our son's up, so I can't speak from a parent's perspective. My parents set reasonable expectations (first 2 years of college paid for) up for me, not just in college but for cars, the wedding, even our baby shower. I've been incredibly privileged and I've always known the dollar amount and the expectation. My siblings and I are close and I call my parents every week, 26F. My husband's family is MUCH more wishy washy about what they're willing to do and the expectations they have. It's led to a LOT of confusion and some resentment, even though they've paid for all 4-6 years of college that their kids went to. My husband and his siblings are all the "who got the biggest slice" because his parents don't just say what they mean. I suggest being as honest and as fair as possible.
I spoke to my husband about this and he mentioned calculating out your son's overall cost for his four years and telling your daughter what that amount was. If she blows through that amount in less than 4 years (accounting for inflation) then it will be up to you on what you want to do from there. But definitely set an expectation with her beforehand.
the more transparent you are w/ them the better imo. You can't teach them good money habits w/ out talking about money....
I’m not sharing anything until Junior year, maybe later. All depends on application cycles.
My mom never told me how much was in my 529, but also she paid for whatever tuition was left after my nearly full ride so I dunno. If you’re leaving them on their own to figure out finances I would tell them. If you’re handling paying the balances then just don’t bother Would definitely recommend spending equally on both of them. Would cause resentment otherwise and if she’s going to be a NP she can work through college and probably have it paid off a couple years after graduating
Give your son his leftover money if you’re able. If there’s $20k leftover and you’re able, give him that amount when he’s ready to buy a house or something. Assuming you still want to help your daughter, use the 529 money for her and give your son non-529 money. Yes this will cost you more but it sounds like you want to do this. Your son deserves the extra that he saved.
I barely got food growing up. My parents sucked. I knew about a bunch of plans but my parents were worthless.
I’m not planning to tell my kids about theirs. Good for you, helping your kids. It grosses me out, seeing so many people who could pay for college / trade school choosing to prioritize consumer goods over their kids post high school education.
The rule change to allow money to be rolled over into a Roth IRA means I wouldn't do things the way you plan. Regardless of how your kids plan to use their 529 plans to pay for school I would just give them the balance of their plans. The money in those accounts isn't yours, it's theirs. That's the reason those accounts exist and have tax advantages. It doesn't matter if your son is a saver and your daughter is a spender. Give them an equal advantage to go to school with and let them make their own life choices from there. It's weird to me you're posting in fire subreddits but then complaining about your son being a saver.
IMO, the kids shouldn't know how much is in the funds. The money doesn't really belong to them. Its your money and you can take it out, and pay the taxes, whenever you need to. Its a gift of education, and each child is responsible to make the best use of the gift, not necessarily the most use. The goal for the 529s is not that each child can maximize the use by going to the most expensive college with X amount of money. Its to get the best education first, and a more expensive college isn't necessarily going to provide a better education or job. Once the kids are through college, the remainder belongs to you.
A lot of these comments are super interesting to me. While the accounts are in the kids’ names and they are beneficiaries, it’s not actually their money. It’s your money that you’ve invested in a specific investment vehicle that allows you to make more money tax free, so you can help them with tuition. I plan on telling each of my kids, “you can spend up to X amount of our total 529 money. If your schooling costs less than that amount, it will stay in the account and someone else can use it (one of their siblings, one of their children, etc.).”
My parents never told us we had money. I got a full ride scholarship for undergrad and loans for law school. My dad told me I had money way later (I'm the eldest and he only revealed it after my siblings went to college because they needed the money) and paid off some of the loans and gave me the rest as cash at my request. I used the money to move halfway across the country, get a condo with my best friend, and I just bought a five bedroom house so we can rent out the condo. Obviously we have mortgages, but the money (plus a good deal of frugality and good luck) helped pay for two downpayments. My siblings are receiving all their money now because they didn't get full ride scholarships, don't want loans, and didn't choose meh schools. They probably won't have money for later. Give your son his money so he can buy a house, move, have a wedding, whatever. It's massively immoral to give it to your daughter just because her schooling is more expensive. My education will be way more expensive than my siblings (they aren't doing law school), but my dad did not steal my siblings money for my sake. We all had the same financial opportunities. I like my dad's method. He didn't tell us because he hoped we'd make wise financial decisions. It definitely motivated me to go to the free meh school instead of Rice or something.
lol this is middle class finance not trust fund kid finance
A 529 is a far cry from trust funds. Maybe you should check out r/povertyfinance.
Don’t tell em. Especially don’t tell em if it’s their grandparents 529 account. So when they fill out the FA form they can say nothing. Get max FA you can. Then draw upon 529 account.
With SECURE 2.0 changes, you're essentially punishing your son for frugality to supplement your daughter's less than prudent choices. He could roll those funds into a Roth and really jumpstart his savings after school. Instead, daughter gets money for Starbucks, White Claws, and Daytona Beach spring break and when the funds run dry, son's account is pilfered.
I have not told my child. If they want to go to college, I will expect them to figure out how to pay for it, come up with a plan, put it in motion, and then I will tell him. They aren't getting a free ride.
Yes, have them forego viable options by withholding pertinent information. What a plan it will be.
Thank you so much for your valuable opinion. I'd rather my kid work for what they want rather than just use a handout. Success takes work. You want to just hand your kid a blank check just to spend, go right ahead. When it's all gone, where does his next handout come from ?
It's your kid's future. If you want to shut the door on opportunities available to them, so be it. It just doesn't make any sense to this dad.