Layout:
Home > Temporary Stop to College Fund

Temporary Stop to College Fund

July 31st, 2011 at 07:15 pm

My husband and I are contemplating a temporary stop to the college fund investments. Right now we fund each daughter's ESA account with $2,000 per year, which is $167 per month. Each month that is $334 allocated from our budget.

While running two households our expenses are tight. We are not yet clear what all the new expenses will be, as some utilities bills have not arrived. Gas usage is still up in the air. I'm on the low side right now, since school and activities are not in session. DH seems to be using more money on food than I expected. He is working on it though. I think some of it comes from boredom.

If I showed you a proposed budget with our investments and required expenses and cash we have budgeted for groceries and fuel, we would have about $330 extra, which is an average of $165 per pay period. It feels really tight.

I'm aware of upcoming expenses that I'm just not sure where the money would come from except from the emergency fund, if we don't stop the college investments. Examples: at least airline tickets for return visits and eye glasses for two.

I'm not decided yet. But it seems that if we stop the contributions we could set that money aside for these bigger expenses on the horizon with out dipping into our emergency fund. Now, if at the end of the year, we have some of that money left we could still make a lump sum contribution.

One idea would be to simply reduce the amount of contribution to $50 each. And make up the difference later.

I actually thought of reducing retirement, but changed my mind when I remembered we can't borrow for retirement! We can borrow for college if needed. Although, we think we will have access to GI Bill funds for our kids, scholarships, and more income at the time they attend where we could cash flow some expenses. We also aren't against them working during college, too!

Some expenses have already been reduced around here: cancelled the newspaper (but miss it), gym membership is going down by about $25 since DH isn't using it. I'm also considering cancelling the netflix discs that come to our house and just go with streaming.

Any thoughts? Would you stop college investments temporarily to keep from raiding your emergency fund, knowing that the reason you are running two households is for the stability of the kids?

5 Responses to “Temporary Stop to College Fund”

  1. Ima saver Says:
    1312137434

    Yes, I would. It is much more important to save for retirement than it is for college.

  2. MonkeyMama Says:
    1312138493

    Absolutely I would stop college savings. Personally, I feel college savings is a very low financial priority. (I personally have never contributed a dime to college savings for my kids. & it's not like I am in denial - I have about 4 or 5 plans in place to cash flow college - none of them require saving any of my income. College is VERY inexpensive where we live).

    The other thing is that your investment time horizon is probably pretty small for college (less than a decade?). So, it's not quite the same as how skipping a retirement contribution now will significantly impact your retirement savings. It will less significantly impact your college savings, because you don't have decades for it to grow. (Heck - I've got 5-ish years to invest for my 8-year-old - if I follow the rule to take money out of stocks 5 years before money is needed. This is largely why I much prefer to cash flow college - investing isn't going to give me much edge. & well, look at interest rates for cash alternatives. Yuck).

    All that said, it just depends on the big picture. Would I be content to be unprepared for college in exchange for student loans? No. If I felt strongly that I *needed* to save more for college, I would. I would hustle to find more income, cut other expenses, or whatever it takes. But if a slowdown didn't really matter in the grand scheme of things, so be it. You just have to examine your goals and priorities.

  3. crazyliblady Says:
    1312141070

    Since your husband is military, could he eat some of his meals at no cost in the base mess hall? I know it is not home cooking, but it is probably better for you and less expensive that ordering for pizza. Another option would be to have sandwich fixings or frozen meals in his apartment so he is not tempted to order out or go out for dinner.

  4. creditcardfree Says:
    1312148343

    Thanks all for the replies.

    @crazyliblady: DH is not authorized to eat in the mess hall for free. He is not eating out at all, it is simply the groceries that are adding up. Likely lots of snacks. He is complaining about his weight, so I expect those will get cut out soon. He is taking his lunch to work/school which is primarily sandwiches. He also hasn't lived alone for over 15 years and handled the cooking for one person...so I think it's a learning curve we are working with at the moment. Thanks for the suggestions.

  5. North Georgia Gal Says:
    1312209415

    I would definately stop the college savings. You can always make it up later, but you don't know when you might need the emergency fund.

Leave a Reply

(Note: If you were logged in, we could automatically fill in these fields for you.)
*
Will not be published.
   

* Please spell out the number 4.  [ Why? ]

vB Code: You can use these tags: [b] [i] [u] [url] [email]