Sunday, January 8, 2012

Where do you save for college?

I'm the first to admit that the college savings accounts for my kids (ages 10 and 6) are kind of pitiful.  The 10 year old has barely $8K, and the 6 yr. old around $2,400.  Since they were started they've been in an equity income mutual fund which has pretty much stayed flat the past 5 years.  I was also informed a couple of months ago that the mutual fund company is no longer accepting new contributions into the ESAs (Education Savings Accounts).  With a maximum contribution of $2,000 per year scheduled to go back down to $500 per year at the beginning of 2013, I guess it's not worth the hassle for the mutual fund company to service these types of accounts.

So what do I do with the $200 or $300 of (birthday/Christmas/extra) money?   Believe me I know it's not nearly as much as it should be.  But I don't want to squander what little bit they have either!!

I'm just starting to research ETF's --- specifically dividend-paying ETF's ---- ones that focus on solid companies that have a track record of increasing their dividend payout year after year.  I know nothing about ETF's .... really don't know if I'll like them better than mutual funds (I'll spare you my rant on my distate of mutual funds and their annual fees wiping out all your profits year after year).

So I'm just wondering.....where do you save for college?

1 comment:

  1. I am so fortunate that my parents set aside money for my kids to go to college (or we'd be taking out student loans), but does your state have one of those "GET" type of prepaid state tuition programs (a 520 savings) you could contribute to?