Quote:
Originally Posted by SmootSmack
Aww Schneed, I'm disappointed in you. After you broke down how you and your wife dropped $50 a month on snapple and aquafina, you were supposed to work your financial wizardry and explain how putting that $50 into your savings account at 6% interest could make you a millionaire with your own 300-foot yacht by 2010
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LOL
Actually, for real, we were contributing $200 a month to my 15 month old daughter's 529 plan (college savings account). Then after that cutback on the beverages at the office, we started saving $250 a month.
We put the dough in stock mutual funds, so I figure we'll earn 9% per year on the investments. As we saved $200 per month, we were on course to build her a nice college fund, it projected to $122,000 by the time she is 18. But by saving $250 a month, we should have $148,300 for her when she enters college. Big difference.
And when you consider that a college like Penn State, which is currently $18,000 a year for in-state Pennsylvania kids, will probably cost $43,000 by the time she's 18 (assuming 5% tuition increases); my daughter will probably really appreciate the fact that I cut back on the Snapple & Aquafina, because the difference between $148K and $122K translates to a reduction in monthly student loan payments of $289.
Her student loan bills, which will surely be high no matter what, will be $289 less per month because we made that cutback and decided to save it for her. I'm sure this year there's something I can cut back on, not really miss, and get that future student loan payment down even further.