Savings can fund siblings' education or grad school
Having one child in college is difficult enough, but financing two or more children consecutively is a challenging feat. And saving on undergrad costs can make it feasible to afford graduate school.
Michael and Mary Pheeny of Dallas have two children attending Texas A&M University in College Station, Texas. Their daughter, Sarah Pheeny, 20, is an economics major; their son, William Pheeny, 18, is majoring in finance. Both children attended private schools from preschool through high school, but the Pheenys decided the public university route made the most sense for earning an undergraduate degree. College Station is three hours from their home, and although the Pheenys did not contract with a financial adviser, they invested in the Texas Tomorrow Funds, a state tuition plan, for their children.
"We did not want to incur college loan debt," Mary Pheeny says.
And with the money saved from choosing the state college route, parents could invest for graduate school. "Some options include a 529 plan, a whole life insurance policy or a savings plan with a mutual fund," says Michael Needleman, senior partner at Fusion Analytics Research Partners in New York City.