Also, I hereby confess to having binge-watched all four seasons of Treme on DVD over the past three or so weeks, often three or four episodes per day. I just finished watching the episodes two Mondays ago, as I took my first vacation day of the year. Some mensches might go sailing or golfing on a vacation day. Taking their boat out or hanging out at their private club. This one noshed on snacks and watched three hours of New Orleans-based drama.
It is a confession because with one of my 2018 resolutions to create more and consume less, it is hard to justify having spent dozens of hours following the trials and travails of this cast of characters set in the Treme neighborhood of New Orleans, a city that I love despite its high preponderance of violence. I do not love its violence; I love its food, culture and music and will be heading there with my son for a week during his spring break.
But I digress.
While going through some finance blogs yesterday, I clicked on one, that led me to another that led me to one that a middle aged middle class Money Mensch like me would not normally read, www.chiefmomofficer.org.
I came across her post called Sending Three Boys To College - My Decade Plus Journey about her family's fourteen years of saving to send her three sons to college. This is the type of post that I find inspiring, someone who invests with Vanguard, like I have for many years, with the goal of sending her children to college without taking on a massive amount of debt.
In her post, the Chief Mom Officer writes about why she is putting this out there. Like me, for years all she read about saving for college was generic advice. It’s either yet another financial media person talking about how you shouldn’t be bothering to save for college because you’re probably behind on retirement, and how “your kids can get loans for college but you can’t get loans for retirement.” Or how you need to pay off debt and save an emergency fund before you start putting money aside for retirement.
Unlike her, I began saving diligently for my two children's college funds prior to reading all the advice about how it is sacrificing your own retirement to do so. Also unlike her, I am coming up on a quarter century of working for employers that contribute to a public pension system that is actually funded, and I expect to qualify for a decent pension to help support my wife and I in our "golden years."
It was not until I embarked upon my self-help journey in early 2016 that I consistently came across the advice to Pay Yourself First and made it a priority that I have stuck with over the past two years. Although it sometimes seems "too little, too late," I continue sending payments to my wife's and my Roth IRA accounts every month prior to paying our other mountain of bills. Our cost of living typically runs from $8,000 to $12,000 any given month, including the $2,500 that we send to our son's private college ten months out of the year.
On another note, my identity was stolen once again as I received a credit card in the mail today that I never signed up for. This could be a post or series of them on its own, but the short version is that I received one of the top credit cards with Capital One in the mail today with a very high limit. High enough to pay for a year of my son's college on it.
The problem is that I never signed up for it. I do have two Capital One accounts, one online savings account and another trading account with a few hundred shares of NUGT parked in it.
So who filled out an application for a credit card for me and had it sent to my own house? I will never know. I called right away to cancel the card and sincerely hope that one of my readers is not the identity thief.
Anyway, because of that, I am not going to go into great detail into the accounts that I have for my children besides noting that they are through the Illinois Bright Start program, the Vanguard Wellington fund, and the T. Rowe Price college portfolio 2018 (which is finally here) fund.
At some point, I will share in more detail how a middle class Money Mensch with a stay-at-home wife with a salary that slowly inched its way up from the thirties to the forties to low six figures over the period of twenty years was able to support his family and save one hundred thousand for each of his two children. It may be one of the more inspiring tales that I have to tell.
But here is the short version:
I diligently saved for years and years, contributing everything that I could while forgoing many of life's luxuries like vacations, expensive meals out, iPhones, flat screen TVs, sporting events and concerts. We still have tube TVs, here in 2018, but we do have more saved for our children's education than many with superior TVs do.
For years, we did little besides local things that were not very expensive. True, we traveled to Disney World six times over these same years, but there were quite a few years where I socked away every spare dollar that I could find the rest of the year. I drove clunkers until they could not drive anymore, while millions of Americans with little to no savings drove cars much newer and nicer than mine.
It is not a glamorous story. Before our accounts were online, I would write paper checks to the Vanguard Wellington fund in equal amounts for each kid, say in the amount of $300 or sometimes $400 or even $500 each, and then walk the checks to the mailbox. A week or so later, I would receive the statement from Vanguard and would put it in the three-ring binder that I still use after fifteen-plus years of doing this. Some years later, I started the Bright Start accounts for both children and have automatically contributed to them ever since. All of our accounts are now online.
There were months when, after all of our bills and expenses, we would have $800 left until our next payday. On months like that, I might send only $200 to each account, leaving us $400 for the week. On months when there was $3,000 in the account, I was more comfortable sending $300 or $400 to each account. On months when there were three paydays or a relative gave us some holiday cash, I would send $500 to each kid's account.
Over the years of doing this, and as the Wellington fund thrived and paid out dividends, which we reinvested, the accounts continued to grow.
Again, this is not a glamorous or sexy story. Like the Chief Mom Officer, I wondered how we could save such a huge amount of money for our children. When my late maternal grandfather, who I was especially close with and who got me started in investing (and recommended the Wellington fund) told me that I should try to save a hundred thousand per kid when I was making about forty-five grand and my wife was staying home with our baby boy (now a college sophomore), I thought he was freakin' nuts. I felt like crying, having only a few hundred dollars to our name.
Instead of crying, he staked me out for about two thousand dollars to start our son's account. Because this was before 529 accounts were in vogue, I opened a UGMA account with Vanguard, and opened the same type of account for our daughter when she was young.
For years, I kept that high number in mind as a goal but never seriously considered reaching it. Just sent $300 here, $400 there and $500. For about four straight years, I automatically contributed $500 to each kid's Bright Start account on the first of every month. New month...mortgage gets paid and a cool grand goes out of our account and into our kids'.
You do that for enough years, and add a friendly market since the Recession, and there you have it. The fifty grand that they each had turned into sixty, then into seventy grand each and continued growing.
I, myself, have only recently eclipsed having $40,000 in my own retirement accounts, and that's for a forty-seven-year-old. I know, it is not the sage advice from a financial adviser.
But as the Chief Mom Officer seeks to put her three sons, Nick, Nathan and Alex through college without them accumulating staggering debt, so this Money Mensch wants the same for his two high-achieving, super-smart, super nice kids.
Our son certainly appreciates it now, and I can only hope that our daughter will come to appreciate it someday too.