Last updated on August 18th, 2023 at 09:50 am
In 2013, the average cost of college was approximately $22,000 for a public university and $44,000 for a private university. How about doubling that cost in order to put twins through college? Pretty overwhelming. We all know how important it is to save for college for our children and to plan for giving them a good future, but when do we start? How much do we need to save and how can we do it? The good news is that it isn’t as scary as it seems.
Having a degree in Finance and Economics and a career in Investment Management for the past 11 years, I was confident that when my twins were born, I would know exactly what to do to get a college savings plan started for them and that I would start it right away. Maybe I would even send in the paperwork from the hospital. That is the kind of person I am. (Or at least that is who I was until I had twins). Somewhere between double diaper changes, breastfeeding, months of sleep deprivation and being a normal human being, the college savings plan I had got lost in the shuffle of raising my babies.
Fast forward a few months later when I could actually think straight and I realized it was time to sit down and get serious about a savings plan. There are several options when it comes to saving for college for your children, but in my opinion, the most advantageous to both parent and child is a 529 college savings plan. A 529 plan is fairly simple to establish and your monthly contributions can be deducted right from your paycheck or bank account making it easy to maintain. This type of plan is set up in the parents name for the benefit of the child where the funds are used to pay for tuition, room and board, books and other fees associated with higher education. So in this case, each one of your twins would need their own account established. The account invests in mutual funds with specified objectives to match your risk profile or your child’s age (i.e. – how long do they have before they are in college). The earnings in the 529 plan grow tax-free and once the child reaches college age, the money accumulated is not taxed when it is taken out as long as it is used for qualified college expenses. Depending on the state you live in, there are several 529 plan available and the plan is managed by an investment company so you can have guidance as to what you are investing in.
For our family, contributing $100 per month to each 529 plan was an amount that fit our budget. Your family might be able to contribute more or less than that amount and that is fine – as long as you contribute something. Make sure to check with your specific state and 529 plan on contribution maximums. Remember that money in excess of what is needed for college will be taxed when it is taken out! Don’t panic if you haven’t started a 529 plan yet or if you are saving for college using a different method. You can always get started now, and anything that you are currently doing to save is a step in the right direction for investing in a bright future for your twins.
By: Victoria Venti Baird – Mom to Carston & Emmett, age 15 months
For more on saving for college read these:
It’s never too early to start saving for college
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