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I'm Getting Clarity

April 21st, 2019 at 05:00 pm

I spent some time thinking through all these college costs coming up and I'm getting some clarity. We have already been notified that we owe my oldest daughter's University $901.25 since we withdrew her VA benefits. They put a hold on her University charge card since it is actually an overdue debt at this point. I will pay that tomorrow. I tried today, but they must have the site down for maintenance.

I will be pulling money out of both daughter's Educational Savings Accounts with in the next month or so, before the mid June tuition bills are due. This IS money we set aside to pay for school, so that is definitely what it should be used for. For my records later, I'm taking out $1560 for DD1 and $1025 for DD2.

In order to get clarity I had to do several calculations, specifically what the expected tuition bills will be for both girls through Spring 2020. I also had to figure how much of those bills we should pay out of pocket for our youngest daughter to qualify for the full American Opportunity Tax credit in 2019. If I take any money out of her ESA that disqualifies those funds as eligible for the tax credit.

Another part of getting clarity was doing a bit of a cash flow scenario, where I can see if we have enough cash available at the time the bills are due. The first time I did it without considering money from their ESA accounts, I was over $3500 short! And I did include loans for my oldest daughter for at least the fall semester.

So in order to not be short the necessary funds, I am withdrawing from their Educational Savings Accounts. I will also use $968 from our tax refund to pay the VA back when they finally do get around to billing us. This will come back out of the Big Savings Goal.

In order to help cover potential costs of my daughter living in an apartment this summer I stopped an allowance to our youngest daughter since she will be home and we can cover any expenses she needs. I am going to stop our Hulu Live subscription for the summer to save $45. I will also stop funding our vehicle maintenance sinking fund for a few months. It currently has just over $1000 in it , and we don't really expect any major expenses and can make it up from our emergency fund, or even the Big Goal Savings, if absolutely needed. I've been adding $275 a month for that. Those changes alone will free up $445 each month to help our oldest daughter. She already receives $125 spending cash from us each month and with her paid internship we don't expect we will need to fully cover all the expenses once she starts getting paid.

I still may need make some changes but I can see more clearly how I can make this work without completely derailing our savings and retirement goals.

Thanks for listening! I do know how blessed we are to have the ability to pay for college and all of our other needs and wants.

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