Working for a university (and an expensive private school at that) has allowed me see first hand how much of a financial struggle it can be when your kids are ready to head off to the hallowed hallways of higher academia. Just looking at the skyrocketing costs of college makes me cringe, as do the statements for my college loans.
I was fortunate enough to get an academic scholarship to the University of Maine at Farmington, and I'll be endlessly thankful for that (I don't get the scholarship, I don't go to that school, I don't get this job, I don't meet my wife, and so on and so on). I didn't take that scholarship for granted then, and I can't expect that Elliot or Eleanor will get a similar type of award when it's time for them to look at college (if that's the path that they choose). Elizabeth and I don't want to rely on this...
...so yesterday I started a 529 account.
The 529 account is a type of college savings plan. You put money into it, and depending on your state you can receive tax breaks by doing so. The money is to be used to fund the beneficiary's education (whether that be at a community college or a trade program or a four year university), and it is tax free when applied to those types of experiences.
There are many different vendors that offer a 529 account. I went with CFNC (College Foundation of North Carolina), which is a non-profit organization that helps people here in NC with the college admissions process. They help with planning, applying, and paying for college, which makes it a convenient and easy to use resource for parents navigating these waters for the first time.
Staring a 529 account through CFNC was very easy. I first had to register with that organization and create an account through them. Next, I set up who would be the beneficiary of the account (yesterday I set up Elliot's, Elizabeth is going to set up one for Eleanor soon). A few clicks, and few social security and routing numbers later, and I was done. It took me less than 5 minutes.
There was a minimum of $25 to start the account, and I set it up to autodraft out of my bank account each month. There was also the opportunity to set your investment portfolio and to manage the amount of risk that you wanted to take with it. I went for the "moderate risk track" which will spread my allocations out over several different funds that mirror what I currently have set up for my 401K (I may bump this up to the "aggressive risk track," which I can only assume is betting on the ponies...)
As I was setting up the account, one of the things I had to put down was Elliot's expected enrollment year for college. After I counted it all out, I came up with the year 2033, which made me pause and look at what I had just typed in wonder. 2033 sounds like a very "future" year. It's a year when we'll have flying cars, a moon base, and an Oasis-like internet system a la Ready Player One. It's a year when a third of the 21st century will have come and gone, a year when I'll be hurtling towards 50...
And apparently, it's a year when the next generation of Farabees will be considering what to do with their lives and if college is the option for them. It's easy to think that the the future is so far off, but if these last two and a half years with Elliot (and the last four months with Eleanor) have taught us anything, it's that life moves pretty fast (a lesson Ferris taught me long before now). 2033 will be here before we know it.
We're hopeful that by starting these kinds of plans early, by the time it does get here, we'll be ready for it.
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