financial literacy

College savings dilemma

Chris and Mike Roe
The problem:
The Roes have two college-bound teenagers but haven't started saving.
The plan:
Open 529 plans for each child and fund them aggressively.
Chris and Mike Roe

Mike and Chris Roe, 43 and 46, from rural Kansas, have two children, a son, 15, and a daughter, aged 12. Mike runs his own small business and Chris is employed by the local school system. Mike has worked hard to make his business a success and is now thinking more about the future.

One of the Roes' primary goals is to have their children attend college. This will take some planning as they only have three years until the first one will enter. They are also faced with the reality of two children in higher-education institutions at the same time.

Mike and Chris want to know what it will take to help their children attend college and achieve some of their dreams.

   The problem


The Roes have a problem that is familiar to thousands of young couples throughout the United States. How do they start at a later date to work out a viable plan for their children's higher education? They only have a limited amount of time before the first one will enter college.

Choose a college
One big variable in this equation is where the children want to go to college. In the Roes' case they are planning for their children to attend Kansas State University either directly or after a two-year stint at local Pratt Community College. If their son starts at community college and then moves on to Kansas State, he will be able to live at home for the first two years, which will save additional expenses.

This will be a big advantage for the Roes. Like most of their other living expenses, the cost of a college education in Kansas is not very high by national standards. In fact, Kansas State has been noted as one of the great bargains in education in several different educational surveys. What the Roes need to come up with is the amount of money they need to have available to support their children in their college careers.

Read more  

This report was prepared by William Z. Suplee IV, CFA, CFP, ChFC.

Key issues

  Two teenagers expect to go to college but family hasn't started saving.
  Need to figure out how much college will cost.
  Have saved for retirement and have emergency fund.
  Don't want to wipe out retirement savings and emergency fund to pay for college.
Jump these money hurdles

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