Spending Season

9 Dec

spending season header


letter Tis the season when it feels like there’s money constantly going out the door and relatively little going in. Between end of the year expenses, property taxes and Xmas gifts and all the little unforeseen incidentals, it’s easy to feel a little financially deflated at the end of the year. As my dad used to joke when we were kids, as long as there are checks in the checkbook there’s money in the account, right?

This is a subject that’s been on my mind a lot lately. The debt-load you need to take on to become a dentist is nothing short of crushing, let alone a practice acquisition loan and a mortgage if you’re lucky. Weighed down by all that red ink it’s tough to look past the nose on your own face. Debt-reduction becomes something of a desperate quest and although my accountant assures me that paying off debt is exactly the same as building savings, I am acutely aware that I’m basically in survival mode — which is to say I’m paying off my debt, but my savings account isn’t anything I would call “comfortable”.

I’m just a few days away from turning 41. At best I’ve got another 30 workable years in me… if I’m lucky. My oldest is about to turn 9. That’s the 1/2 way point. The years we have to get her ready for college are just as few as the years we’ve had since she was born, and those years FLEW by.

I have realized that there are things a responsible member of society must do no matter how painful: Pay taxes, take care of your health (re: exercise), and financially plan for the future. That means it’s time to stop living week-to-week like we did in our 20’s and 30’s and start thinking about our 70’s and beyond. It’s time to start thinking about things like 401-k’s.

In short, it’s time to start saving.


When you’re a moderately successful blogger *snort* sometimes opportunities present themselves to you. Recently I was invited to attend an event put on by ScholarShare, an organization that runs 529 accounts (I know… my eyes glaze over too with talk like that. But I have pledged to make this sort of knowledge part of the new “responsible” me… just like exercise.) 529 accounts are essentially the same thing as 401-k’s, only where 401-k’s are retirement accounts, 529’s are college savings accounts. Essentially, just like with 401-k’s, you invest your money with higher risk for larger gains in the beginning, and then as you get closer to the time when you need the money it gradually moves into lower risk investments. What particularly strikes my fancy is that for three kids that have more toys/junk than they can ever appreciate, during the holiday season family members and friends can contribute to an existing ScholarShare account or create one for a child as a holiday gifting option for as little as $25.



ScholarShare treated a bunch of bloggers to a fancy dinner to talk about 529’s and even offered a little compensation thanks to One2One Network (that was nice of them) if we shared the experience on our blogs. In truth, this is a talk I would have gone to whether or not there were blogger incentives. Saving for college is something I need to get serious about and I wanted to hear what they had to say.
The short story is the people from ScholarShare came off as very genuine and honest. I was wary of walking into a timeshare-pitch sort of evening. There was no salesmanship, nothing pushy, no used-car-salesman vibe at all. In fact, since they partner with TIAA-CREF they are a non-profit, so they don’t pay their bills with transaction fees like other financial planners. All they wanted was to get the word out that 529’s are the best way to plan ahead for college savings, and that they would love to be considered by anyone looking into one.

For my money, they seemed like a legit outfit worthy of consideration.


That said, I’d like to try something a little different with this post.

For the sake of getting my head around how to financially prepare for my kids’ college, I’d like to start a little conversation in the comments below. How are you preparing for college expenses (or how did you prepare)? Do you think college is even an investment worth making in today’s world? (There’s a good argument to be made that it isn’t). What are your fears about saving for college/retirement? What do you know now that you wish you knew then?

In the comments below share your knowledge. Share your fears. Share your questions. Maybe we can help each other out.


-Dork Dad

16 Responses to “Spending Season”

  1. memyselfandkids.com December 9, 2014 at 8:37 pm #

    I have not started saving for my children’s college. The cost of college is outrageous, and I think and hope that more alternatives will continue to arise as many can not afford the exorbitant rates. Of course, there are loans but they can be burdensome.

    • dorkdad December 10, 2014 at 5:17 am #

      Does that frighten you at all? Are you “planning” or are you coming at it more from an “I’ll deal with it when I get there” perspective?

      • memyselfandkids.com December 10, 2014 at 9:02 am #

        I don’t know about frighten. I am somewhat concerned but I have other financial issues to worry about first. I do think we’ll be able to contribute to paying for college. However, loans and or scholarships will probably have to come into play.

  2. teachezwell December 10, 2014 at 6:24 am #

    We lost a major portion of our son’s college fund when the stock market crashed back in the 80s. I wish we could have had better financial advice. It all worked out well but college no longer has that seemingly assured relationship with future employment. It’s a different era. Our son had just graduated when the economy tanked. He applied for hundreds of jobs with the rest of his grad school pals and ended up starting his own business. Quite different from how we imagined things would go. Does the 529 have safeguards against the stock market calamities?

    • dorkdad December 10, 2014 at 6:38 am #

      Not that I’m aware of. Just like any “investment” you have to accept the risks with the potential up-sides. All it protects you from is the tax liability on the gains you see.

      • teachezwell December 10, 2014 at 2:44 pm #

        Thanks for the tips!

  3. Carter December 10, 2014 at 7:01 am #

    We are firmly in the save for college camp. My parents did it for me, and I want to do that for our sons. We enrolled in the Florida prepaid plan and locked in that year’s tuition, which we believe will be a huge savings by the time our kids are in college.

    • dorkdad December 10, 2014 at 7:28 am #

      Ah yes. The lock-in tuition plans. But those are only good if your kid goes to public school, right? What if your kid gets into Stanford? (c;

      • Carter December 10, 2014 at 7:33 am #

        There are provisions for out of state and/or private colleges. Plus, my kids are both geniuses and will earn full academic rides, so the money we save now will be available for our European vacation in about 10 years.

  4. The Cutter December 10, 2014 at 7:02 am #

    My eldest daughter has a decent college savings already. Anytime she gets cash gifts as presents, we put it into her 529 fund.

    And remember, college can always be paid for with scholarships and loans. Not that student loans are a great thing. It’s essentially kicking the debt can down the road to your kids.

    • dorkdad December 10, 2014 at 7:30 am #

      Scholarships can only go so far, particularly when tuition is creeping up on $50k/year.

  5. Charles December 10, 2014 at 10:58 am #

    Appreciate this post- I have a 5,3, and 1 year-old and while we wish we could be stocking money away, it just isn’t possible for us right now. We do put the money we get as gifts for the kids into savings and need to explore whether we should just open 529s as you suggest. I’m fortunate to have paid off my student loans but we’ll be paying my wife’s loans probably till it is just about time for our oldest to head off to college!

    • dorkdad December 10, 2014 at 11:05 am #

      I feel the same way… but somehow I have to figure out how to make it happen. Whatever the solution, I’ll take a successful non-profit over the alternative any day.

  6. kjysten December 11, 2014 at 1:06 pm #

    As “old” parents (our kids are 47 and 49) we managed the college bit for them through encouraging them to work and sending them to Junior College first. Saved BIG on tuition. We worked while we were in college and so did they. Then, scholarships were a big help.

    For retirement, Chuck participated in a deferred compensation plan with the city. I put every “raise” I got into a TSA account. That plus the little he gets from social security and what I get from teacher’s retirement allow us to do OK. The fly in the ointment for most people is that I had land in California that we sold and lived from so we could stock paychecks away for the future.

    A “funny” note; when Chuck got out of the Air Force and we back to CA in 1970, neither of us could get a job. We had little savings then, and two little kids (3-5). We broke down and went for welfare. The answer: You have land. Sell it. You have a car, sell it. The land wasn’t selling and the bank wouldn’t loan money on buckets of dirt. Without a car there was no way to look for a job……Catch 22. We did get food stamps.

    Our answer: move in with his folks and work their ranch while they went on a year long camper circuit of Canada and Mexico. I got on with the YSC at a VERY low wage and he finally got on the PD, Then I sold 40 acres and it’s been uphill since then.

    Land can be a good investment, BUT you have to be ready to part with it. It took 2 years, ulcers (mine) and a threatened lawsuit to get my mother to release the 1/2 I owned in joint tenancy with her so I could finance our family.

    On retirement, we financed this place with the money Chuck got when his parents died and we sold their ranch. HOWEVER, I sure didn’t want them to die so we could do it.

    Life has it’s ups and downs but we both learned that being together is worth the cost. May you be as tough and fortunate. It will all work out – maybe not as you wish, but hang in there, LUV :>

  7. Nikita December 21, 2014 at 9:22 pm #

    Is college a good investment? I guess it really depends on what you want to do with your life. If you want to be a doctor, lawyer, dentist, nurse, CPA etc, you maybe will be able to get the skills you need (somehow) without the degree, but no one will let you practice without it. So there is the conundrum, how would you/kids know what they’ll want to be 10-20 years from now. Hence, I think saving for college is really important, especially from my own experience:

    My parents saved up so that by the time college rolled around, they’d be ready (not with a 529, my dad is very heavy on investments in mutual funds which are not high risk but have higher returns – happy to discuss that in further detail with you if you’re interested). As it turned out, I went to a state school where I was able to establish residency after the first year and got a good scholarship so it ended up being relatively inexpensive. By the end of it, I hadn’t used up much of what they had saved. Anyway, my parents gave me the option on what I could do with the leftover “college money”. I could a) go to grad school or b) propose a business idea and if I could secure VC funding, they would give me the money. I went with option a because I decided an MBA would be the best investment. I’ll let you know how that turns out in the next few years…

    Bottom-line, I’m really grateful that my parents did that for me (of course, I’m any only child, and you have three, so you’re facing triple the pressure). Apart from saving for your kids though, I think teaching children financial skills from a young age is an extremely important lesson that is often neglected and has resulted in some pretty disastrous money management issues in our country. So in reality, more than the actual money, I’m grateful for the financial skills my dad taught me. Totally separate topic, but possibly worth discussing someday. Sorry for the long post, Black Widow out.

  8. Chris December 28, 2014 at 7:20 pm #


    Here is some information I found out about college graduates. While the number of college graduates are on the rise, it is still only about 25% of the population (25 and older) with a degree. But, here is what that gets you. The median weekly salary for an individual with only a high school diploma is $640 per week. (just over $33k per year). The median weekly salary for an individual with a college degree is $1,100 per week ( or $57k per year). Not that money is the only score that matters here, but here is another…during the height of the Great Recession, when unemployment was over 9%, the unemployment rate for college graduates topped out at 6.8%. More than these statistics, i think a college degree is proof that you can focus and learn something. Granted, it is not the only proof, but it is one method. As for the 529, it is definitely the way to go. Again, back to the numbers. Just $50 a month for 15 years with a nominal rate of return (5%) returns you over $13k. Now, I know what you are thinking…tuition is going to be 50k per year. Well, pay special attention to any of the limitations on the 529 program. Make sure you are in one that is flexible as possible. For instance, if Episode IV becomes a soccer star, then you can transfer the money to Episode V. Also, make sure you understand what expenses it can cover (e.g. tuition, room and board, activity fees, technology fees, etc.). In addition, make sure you look to see that you are not in one of the state “lock-in” or prepaid tuition where it isn’t much good if they go out of state. Also, for me, I want enough money in the 529 for my little guy so that I minimize the loans or out of pocket spending. I don’t want more than he needs, because this is a use it or lose it proposition. Finally, your “episodes” are already learning that they are not each the center of attention. i think that this is a good chance to set some expectations on what you will contribute for each of them. For instance, it might be that everyone gets 2 years from Mom and Dad and they have to earn the rest. It is a stressful topic, but it involves careful planning and discipline. Hope you had a Merry Christmas and have a Happy New year!


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