The Ticking Time Bomb

The other day I was chatting with my mom, and the subject of investing came up.  My mom said, "At least your kids have college funds."  Awkward silence while I let the waves of guilt crash over me.

"Mom, only Isaac has a college fund, and he doesn't even have enough for a semester."

To be fair, we've only recently gotten our financial house in order, so to speak.  We had a money pit of a house in Portland that was heavily mortgaged.  We finally sold it for a pittance two years ago, and only paid off the loan on that house last summer.  I finally paid off the last of my student loans last fall.

However, Isaac will be eleven in August, and Mindy is hot on his heels.  2019 looms in front of me like financial Armageddon, but even though one of my favorite hobbies is financial forecasting (I am a CPA, remember), I don't spend much time thinking about college funding.  I don't know if it's just boring to me or if I'm in such a blind panic that it's better not to think about it.  College funding has the same effect on me as when Jacob talks about his IT work.  My eyes glaze over and my brain shuts down and I wake up a few minutes later not knowing quite what's going on.

My son goes to college in just over 7 years.

I was thinking that Pepperdine University would be such a nice place for the kids to go.  It's a Christian school with a very good reputation in a nice location there on the beach in Malibu.  What a nice campus to visit, and the kids could go away to school and only be a thousand miles away!  So I went to their website.

Did you know that the annual cost of attending Pepperdine is more than $50,000 per year, and they haven't updated their cost estimator since 2009?!?!

Blind panic.

Okay, so perhaps Pepperdine is a bad idea.  Who wants to go to LA, anyway?

I looked at the cost of attending my alma mater, Harding University.  It's more than 2,000 miles away and the location is, well, Arkansas, but the annual cost is less than half of Pepperdine.  Okay, so maybe it's not the best campus to visit.  There's no sunny Pacific Ocean, no bustling metropolis, no sterling reputation.  But it's affordable.


Then there's Portland State University, where I did my post-baccalaureate accounting studies.  It's about $10,000 a year for tuition, and the kids could live at home.  Admittedly, it's not as cool as living in Malibu, but through the lenses of cost PSU starts looking downright shiny, doesn't it?

Or they could go to Clackamas Community College and ride their bikes to class every day.  I hope it doesn't come to this, but thank heavens for community colleges, right?  Jacob and I have both taken classes at community colleges and the modest expense is a life-saver.

I know that there is financial aid available.  Hopefully my kids will keep their grades up and get lots of scholarships, but I doubt they'll qualify for need-based financial aid.  I thought about retiring early so we're broke when the kids go to college, but considering I'll be barely forty, I can't see that being a wise option.

The most common methods of college savings (other than pretending it's not going to happen) are 529 plans and educational savings accounts.  529 plans behave a lot like a Roth IRA.  The money is put in after taxes, the growth and income are tax-free, and the money can be withdrawn tax-free as long as the distributions are used for qualified educational expenses (college).  One of the nicest things about a 529 plan is that the money in the plan still belongs to the person who invested it (me).  If your kid turns out to not be college material, you stick their younger sibling's name on the account and pretend it was theirs all along.

Educational savings accounts are a lot like 529s, but they lost their shininess after 529 plans came along, mostly because the contribution limits have been pretty low and the money in the plan belongs to the beneficiary.  However, at least the way the law stands right this minute (I think), you can use the distributions for educational expenses even before college: private school tuition, for example.

So, how am I going to save for my kids' college education?

Uh . . . . . .

. . .

. . .

Huh?  What?  Sorry.  I must have blacked out for a minute there.  What were we talking about?

A few of life's mysteries

Here are a few questions on my mind today.  Feel free to respond if you have any theories.

Why do people use tanning beds?  Seriously.  Why?  Tanning causes cancer and makes your skin wrinkled and leathery.  If you overdo it, you end up looking pretty scary.  I just don't get it.

You know those silly web surveys like the ones they have on msn.com every day?  Today it is asking for reader's opinions on some teen's rather tasteless faked suicide.  Your choices are that a) you think her video raises awareness of bullying, b) her project was "unsettling," or c) you have no opinion.  My question: is it really necessary to have an option for people who have no opinion?  Couldn't they simply not participate in the survey?  Where they need a "no opinion" option is on voter's ballots.  I've been known to occasionally do some eenie-meenie-miney-moe.

Aren't they angelic?

Why do children spend so much time and effort driving their parents insane?  Do they enjoy being yelled at?  Get a kick out of punishment?  Like the idea of having crazy parents?  Are they simply addicted to drama?  How can the sweet child who cuddles you before bedtime be the same one who gets called to the principal's office?  A few minutes ago I came stomping out of my room because Mindy was playing the same note over and over and over and over on her ukulele.  She was also singing along (same note) with words something like "Isaac is a big jerk.  I hate Isaac.  Isaac is a stupid head."

Similarly, why do siblings fight so unceasingly?  I'll never forget a lovely game of Risk I played with my husband and two of his cousins back in college.  The cousins were pre-teen siblings, and not once did they attack anyone other than each other.  Jacob and I annihilated them.  It was so easy.  They didn't even notice because they were having such a blast attacking each other.

Why do I get the munchies?  I'm not talking about any side-effects from dope-smoking. I'm talking about when I suddenly am consumed with the insatiable need to eat absolutely everything.  I'm not actually hungry because it's not possible for my pathetic metabolism to require that kind of calorie load.  I'm not eating my feelings because emotionally I feel dandy.  The munchies often hit, oddly, at bedtime.  Usually I crave toast, specifically.  Even better if it is with a mug of hot cocoa.  I rarely get up and have the toast because it won't help.  The need for the toast is bottomless.

Any burning questions on your mind?