exclaimers diverts!shooter darkroom …

Thanks, Trent, for your answer. I think your position is very reasonable. We chose to invest in a non-restricted fund for Hayden’s future – we have the understanding that he may use it for college if he wishes…or a car, or a house, or to start funding his own retirement…or to travel Europe or to pay rent for a time while focusing on his art…we don’t consider ourselves to be saving for his “college” so much as his future. We think ceding the potential tax benefits of the 529 was worth having more options and greater control over the money.

@ getagrip

You’re absolutely right about being able to change beneficiaries; that’s definitely one of the reasons I wondered if Trent and his wife would simply roll over the tax-sheltered earnings to another beneficiary (i.e., one of their other children) rather than let their child cash out the fund. I also agree with you that if you are not prepared to hand over the cash at some point with no questions asked, you are much better off to teach your children to consider the fund your money, under your control, and to be distributed at your discretion. I think if that’s the case, it’s also a wonderful idea to have some amount of money that is specifically for the child, to use at his discretion. For instance, my grandparents bought us all McDonald’s stock years ago – some of my cousins cashed it in their teens (for cars, mostly), some in college (for tuition and CC debt, mostly) and some of us still have it! It was a good way to get financial experience without having control over more substantial funds our parents might have earmarked for specific goals.

The 529 money does not have to be theirs, as the “owner” of the account, you can change the beneficiary to another child, to a cousin, to a grandchild, etc. or even to yourself if you need a late career retraining opportunity. As a matter of fact, Trent’s definition in his response concisely states it’s not their’s, it’s his and his wife’s gift to them and said gift is dependent on them defining a purchase or use acceptable to Trent and his wife. Trent’s premise is that he will have a child who will be a reasonable, responsible kid and hopefully that will be the case.

My opinion is that you need to let your children know that the money is your money, not their money, and that you are planning on gifting it to help them to further their education (be it college, trade school, culinary school, whatever). Other options can be discussed and that is between you and your kids. But if you train them to think of it as their money, IMHO you are morally committing to just handing it over when they turn 18. Anything less and it isn’t really their money and you’ve been lying to them.

I don’t think you are someone who would come totally undone if things didn’t work out exactly as planned, but there are those who are.

In general, you should plan to accumulate a certain dollar figure (Y * 1 million), which will give you the freedom to do what you want. Y = ROM (rough order of magnitude) of what you want in life (e.g. owning a Castle in Scotland vs. having a nice, paid-off house in Iowa). For a youngster like yourself, USD$2 million is likely the *minimum* amount of money you’ll need to accumulate.

Don’t forget that healthcare in your post-retirement years will likely cost you (out-of-pocket) several hundred thousand dollars. Not to give you a hard-time, but, get your weight under control (your waist under 40 inches) and your healthcare costs will go down.

Figure out Excel or Open Office’s spreadsheet PV, NPV, FV functions and spend an afternoon playing around with the numbers. It’s fascinating stuff.

Keep your expenses low (house, cars, and investments), have fun, and party like it’s 1999 (but only once a year)…

My question is how you organize and chart your progress. I would love to see visuals of this. We too, have goals, etc for the short and long term but they are all over the place. Also, you are young…how often do you re-evaluate your goals/dreams? I am only 5 years older than you, yet my goals/dreams have changed quite a bit since I was 30. Thanks.

So good to see another single woman with no kids posting here!

You sound like you have things very well set up, and your goals (dog, travel, etc.) sound wonderful.

Good for you!

My life goals? Um … basically having the most stimulation — relationships, service, “art” — with the least stress. That’s why I live solo by choice (grew up in a huge family) and left my job to freelance from home.

Self-employment is certainly stressful, but a “real job” was far worse because I spent so much time commuting and away from the house, which is a PAIN to maintain. Much easier if I can run out at 11 a.m. and trim the hedges for 15 minutes (BORRRRRRRRRRRRRRRing).

:-)

How expensive and time consuming is it to replant your land once, you’ve harvested the lumber?

How profitable is this method really?

Thanks!

“how are you coming up with 1.3 times your salary, since you no longer have a salary.” – I’m using my previous salary (2006) with inflation adjustment, since our spending hasn’t really changed too much since late 2006.

I do have a question. I have numerous philosophical issues with paying for a child’s college education, but I understand that many people find pride in being able to contribute to that goal for their children. However, when it comes to putting money in a restricted fund like a 529, my question is this: What if your child decides against going to college? This is not a flip question, as I’m quite serious – what if your child decided to pursue a different passion and felt that college was not for them? Would you allow them to cash out the 529 (and take the tax hit)? Would you give split the money among your remaining children who did plan on going to college? I’m interested in hearing other options you would consider at that point.

I’ve scraped up about $400 that way in an ING account for him so far.

I was going to have it be his little independence fund for setting up his life after high school. However, your previous posts about how there are other things to education besides college got me to thinking….and I figure if he wants something extra along the way (an instrument for music class, a class trip, etc.) and we don’t have the money in the budget, we can tap that fund for him so he doesn’t have to miss out.

It sure beats blowing that cash on toys or playground equipment he won’t play with, anyway.

I’ve heard Dave Ramsey’s suggestions for budgeting with an irregular income (he offers this free worksheet), but I would love to see more from you on this subject.