College Savings are hard to plan

If DH and I remain employed at our current jobs for the next ~6 years (something that is not incredibly likely given DH’s job situation), then we will not qualify for financial aid at most schools.  (IIRC, we’ll be in the phase-out range for Harvard and Princeton and may be able to move money around to get some aid there.)  If one of us loses a job, then DC1 will qualify for about ~10K/year in aid at many private schools, which isn’t that much given sticker prices (although on just one income, hiding moving money around will have a larger effect).

We currently (barring weird changes in the stock market between the writing of this post and its posting) have around 98K in DC1’s college account.  That’s $500/mo for the last 10 years invested in Vanguard.  That’s enough to go to our local flagship schools for 4-5 years if we stop saving now.

And that really sounds like a lot.  But in the world of private schools it isn’t.

It’s hard to tell what DC1 will want to do in 6-10 years, but current indications are that computer science or some form of electrical engineering will be involved.  Zie might want to go to MIT or Harvey Mudd or Stanford (and zie might get in– it is hard to say).  These schools are not cheap, and at >55K/year in total costs (and rising), there’s not enough in the 529s to pay for even two years of school. We have another $170K in taxable stocks (that’s from the 50K we had in 2005 and the leftover money from leave we just put into the market) that presumably we would use for the remainder.  However, we will be taxed on that remainder, so it might make sense to start saving *more* in the 529 vehicle while we still have six years for earnings to accrue.

Indeed, the simple saving for college calculator suggests that we would need to more than double our monthly contribution for MIT and almost triple it for Harvey Mudd.

If I drop DH’s income, then the college calculator suggests we should start putting away $638/mo, which is still more than the $500 that is currently going towards college.

Both Harvey Mudd and MIT have 5-year BS/MS programs that are a good deal.  DC1 is so young– maybe we should be open to funding some graduate school.   It is also true that we have two children, and by the time DC2 is ready for college, we should know how much DC1’s experience ended up costing, so we’d be able to move some money over.  As of this typing, DC2 has $33K in hir 529 plan.  We’re on an oversaving path for hir for state school (the calculator recommends cutting back to ~300/mo), but would need to put away more for the average private school– for my alma mater, for example, zie would need more than double what we’re putting away (same for engineering schools, though it’s harder to tell if engineering is likely with a preschooler compared to a 6th grader).

Looking over all my old 529 posts, I usually contemplate putting less money into the 529s.  This is the first time I’ve addressed putting more money there.  I’ve been assuming we wouldn’t pay for any graduate school and have been worried about the risk of over-saving.  But with only 6 years left before college, I think it is unlikely I’ll end up moving to work for a university that pays even part of school tuition.  And college costs have been increasing, as has our net worth.  Maybe it makes sense to get more tax advantage, especially given that in 6 years taxes may have to go way up (or inflation may be sky rocketing).  It’s hard to say.  Not to mention that $500/month isn’t worth what it was 10 years ago.

And we’re no longer paying $1200/mo in principal and interest on a mortgage.  If DH doesn’t lose his job, that money has to go somewhere.

Under what circumstances would we regret putting more money in the 529s?  1.  If we move to the bay area for DH’s job and want to buy a house.  That scenario suggests needing loans for private school and DC1 being on hir own for graduate school.  2.  If for whatever reason neither DC1 nor DC2 end up using the money (ex. tragedy, one or both of the DCs becoming successful entrepreneurs, both DCs deciding they prefer much cheaper college options).  3.  The world goes to heck and we have to leave the country (in which case money in the 529s will be very low on our list of regrets).

Ugh, I keep going back and forth on this.  I could increase our monthly contribution to be more in line with what the simple calculator thinks we should be contributing, and then we could cut if off if DH loses his job.  We could put in a lump sum (though dollar-cost averaging seems much less risky given the current uncertain political environment).  I could split the difference and put in, say $750/month per child instead of either $500 or $1000 (which is about what we would need if I kept my job and DH stopped bringing money in entirely).  Or we could just keep doing what we’re doing, which is usually the easiest thing to do.

*note for newer readers:  We are already maxing out our easy retirement options (required contribution, one 401K, one 403b, one 457) and will pay off our house very soon.  So don’t worry about our retirement savings or debt loads!

What are you doing in terms of college savings?  How do you decide to change what you’re doing?

Link Love goes marching on

We’re at various women’s marches today.  Around the world!  If you see James O’Keefe at yours, ignore him.

All of the depressing links are from #2, who you may have noticed is back on the blog after an absence.  She also notes:  Anyone can text their zip code to: (520) 200 2223 and it will instantly shoot back your Federal and State Senators’ and Representatives’ names and phone numbers.

If you do one action this week, a good choice is to call your senators to ask them to vote No on Jeff Sessions because he’s a bigot.  Do this whether your senators are democrat or republican.  Let them know it is not ok to appoint a bigot as attorney general.  The Sessions vote is this Tuesday, so call monday or before.  You can also call the committee.  Here’s more info and a script from Nick Decaro.

Staggering list of cuts.

Bethh has a new newsletter.  This week is on how to cope.

Resistance manual

The beginning of the Trump year(s).  My dept chair told me today that he suspects that in a couple of years Trump will do a Palin and declare he’s made America great again and quit.  He already doesn’t leave the house.

Republicans are lying about the ACA.  Republicans are lying about the ACA.  Republicans are lying about the ACA.  Ugh I am SO mad about this.  (And one more link explaining the ACA)

An important theoretical insight is that gerrymandering becomes fragile over time– the very thing that makes districts just a little bit more red also makes them vulnerable when the opposition gets determined

The other John Lewis.

CNN sticking up against fascism

Full Fascism ahoy

Barack Obama’s academic cv, updated

Mike Pence Inauguration invite comment section

Was there a huge crowd?  (How about when you subtract the police?)

Bruce Springstein cover band wasn’t there.

Worst Twilight Zone episode ever.

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twinkies palmer candy recall

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“two useless but true theorems are proved

kid scientist logic

debt is a funny thing

password protection

best selfie

Ask the grumpies: Post-retirement activities?

chrisinny asks:

Contemplating retirement in 12 months. It is recommended to have a plan for your life when work no longer fills so much time. Well, work (and raising a child) pretty much filled most/all of my spare time, with a little left over for reading and quilting (neither of which can I really use to fill a day). So any recommendations for new interests to take up? I may try some volunteering (which had done at the library in the past) but need to find where I can make a contribution (but have no interest in being in charge, of anything). Live in a rural area with access to a tertiary city- so apps like “meetup” are ok for occasional, but not daily activities. I do have a spouse but he has been retired for years so he already has his own routine(s).

Have you considered political activism?  If you live in the US, there’s a lot of work that needs to get done.  Click up on our activism tab for ways to get involved.  I know it’s not the most fun thing in the world, but it’s so important right now.  Living in a rural area means that your voice is especially important because you’re likely to have representatives who are not 100% blue and can be swayed with some effort on your part.  Being in charge can really suck, but you might be able to nudge those who are in charge into being a little bit more active.  This is especially true with state and local politics.

Your library is a great place to go not just for volunteering directly (or for reading books)– they can also connect you.  For example doing people’s taxes for free at the library is a popular volunteer activity and one that can be done in rural areas.  Ask your local librarian about that and about other groups in your area– the library is a place that many groups meet, particularly in small towns.  Your parks and recreation center may also be able to help you but they might think the request is odd whereas librarians will totally think it’s normal.

#1 recommends anime.  :)  #2 recommends your local animal shelter.  Other popular retirement activities include taking continuing education classes, doing exercise classes with parks and recreation or the YMCA, gardening, cooking, hunting, hiking, etc.  And, of course, travel… or working part-time.

Good luck with the next stage!

What recommendations does the Grumpy Nation have?

RBOC

  • Someday I will figure out the light switches in the house I’ve been living in for 10 years.
  • the best thing about dc1’s after school care at this public school is that they provide extra time on early dismissal days so we can pick hir up after a full days work.
  • hibiscus mint is my new favorite tea
  • I ate moose.  I like elk better, but it’s still pretty good.  I like elk better than venison and venison better than beef, but beef better than moose.
  • Over Christmas, the next oldest cousin (~2 years younger than DC1) was literally bouncing off of walls, so I started quizzing hir on hir multiplication tables.  It worked to calm hir down just like it does with my kids.  Hir father looked at me a little oddly though.  :/
  • Dear conference organizer, if you want me to pay attention to specific parts of your email and get back to you in a short time frame, WRITE SHORTER EMAILS.  I don’t actually have to do anything until the end of next month so I’m not going to read your multi-page email now.  If you have responses that you need before then, you need to put them and their deadlines at the top of the email in an itemized list, and, if there is information in your lengthy screed that I need to get you those responses, either tell me where to find it or repost it.
  • DC2 was getting hives on hir face at night and sometimes in the morning.  We think we’ve narrowed it down to hir toothpaste (it’s either that or the water or the towel she had been using).  We’ve switched from toothpastes with red dye to those without (and rewashed all the clean hand towels, just in case) and it seems to have gone away which suggests it’s not the water.  Zie was also a bit hyperactive and defiant the weekend that was the worst rash-wise, so I’m kind of wondering if zie has that red dye allergy that people talk about on mommy forums.  (Hives also happened in conjunction with hir deciding zie only wanted bubble-gum flavored toothpaste, not mint.  Now we’re using Tom’s of Maine strawberry and it seems to be ok though DC2 is upset that it is strawberry and not mango.)
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How do you account for big purchases in your budget/cash flow/etc.?

Stacking Pennies recently asked on her blog how she should account in her budget for spending on a new car.   She’s taken out a 0% loan (that she doesn’t need) in order to take advantage of the ability to leverage that money at no risk.  There are also complications involving getting a buyback on her previous car.

She wonders if she should put the 20K in a separate account both physically and mentally as if she hadn’t gotten a loan at all, or if she should incorporate the buyback and payments into her regular budget, and if so, how?

Now, there’s a proper accounting way to answer these questions, using assumptions about depreciating assets and so on, but proper accounting methods aren’t necessarily that helpful in personal finance where we aren’t getting tax breaks on rates of depreciation (meaning you should still do them for rental property or small businesses).

Instead what matters is that you get the information that you need to get a handle on your spending and your savings so that you’re taking care of your future self, saving for things you want to save for, and not penalizing yourself unnecessarily in the now.

There’s no one right way to deal with large lump purchases in your budget.  It’s whatever helps you keep track and make decisions.

I tend to think of things just in terms of my “emergency” fund (really it’s a slush fund since it includes money both for emergencies and for regular lumpy expenses) and how much it is growing or shrinking each month.  Whenever we have to decide on housing expenses like rent or a house purchase I’ll look at the whole fiscal picture and map out what we can afford, but in generally I’m really lazy about keeping track of our money, so just looking at the size of our slush fund each month.  We can do that because in general we spend a lot less than we earn each month.  So in the new car case, the car purchase might deplete our slush fund below levels that I felt comfortable with, meaning more of each month’s excess would need to be diverted to savings, and any monthly car payment would make it more difficult to refill the slush fund.

Another common strategy is instead of having one “emergency/slush” fund is to have specific separate accounts.  So car spending would come out of the “car” fund and anything not accounted for with the car fund would have to come out of the actual “emergency” fund (or luxuries fund or what have you).  Then you’d take into account the inflows and sizes of each of those accounts each month.  This method is similar to my lazy method but allows for more control.  You can better fine-tune your monthly spending and tracking of monthly spending so that you don’t have to have such a big gap between your take-home income and your spending.

How do you account for vehicle purchases (both with and without loans) in your budgeting?

Link Love

I’ve been busy this week with activism (and class prep and research, but lots of activism).  I’ve been calling and talking and doing my best to protect the affordable care act.  Don’t let anybody tell you that your calls don’t matter.  THEY MATTER.  If you’re in a blue state, your representatives want your calls and letters and emails.  This information helps bolster their claims about what their constituents want and really care about.  So don’t think, well I know my reps are in favor of this so I don’t need to call.  Call.  Leave a message, or talk briefly with a staffer.  Email or fax if you can’t call.  If you’re in a red or purple state, your calls and faxes really matter.  I have been amazed how my senators’ staffers message has changed just over the course of two weeks from of course we will repeal immediately without replacing to… well, people will still have the ACA for 2 years.  Similarly on getting in ethics reviews before hearings.  We are pushing that dial and we can keep pushing it.  Bad legislation is still going to get passed.  People are still going to die, but if we are vocal and continue being vocal, we will drown out some of the voices of evil (I’ve recently started believing evil exists again).  Bad legislation will be passed, but it will be less bad than the legislation that would have been passed without our efforts.  Let them know we’re watching.  Keep them accountable.  We are saving lives.

My local legislators are undecided on a couple of extremely vile bills coming through the pipeline.  That means that they’re waiting to hear which direction their vocal constituents are leaning.  Be those vocal constituents.  (Today one staffer told me she agreed with me, but the legislator had not talked with staff about his view yet.  She hoped he voted no.  The staffer for my other guy ended saying he was excited to pass along my thoughts and my argument.  They’re both against evil too.  But they need our voices to add to theirs.)

And if you don’t want to make calls, don’t tell people calls don’t matter.  That’s the same mistake anti-vaxxers make– if you truly believe that you don’t want your kid vaccinated, you should want everyone else to vaccinate their kids in order to keep your kid safe.  Instead, do what you can (which hopefully is faxing or letter writing or emailing or limiting to 15 min per week of activism or whatever it is you are doing to protect your time and sanity) and praise the person who is trying to get you to pick up the phone for what they’re doing on your behalf.  People will understand that you need to get tenure or you’re dealing with grief or your children need your attention but you’re doing what you can.  And you know, three years ago, your lone voice might not have mattered.  But that’s the thing.  With the Trump presidency, people like me who only vaguely knew the names of their representative or that other senator are making phone calls *every single day*.  People like my sister are calling AND are organizing local groups to meet each other and talk to each other and get things done.  People like wandsci are keeping us aware of what is going on via social media and are calling too.  That means your voice isn’t the only voice.  It’s one of many, but of a small enough of many that your voice still matters.  You need to keep calling because your voice amplifies other people’s voices.  And there are enough other people’s voices that we can get change.  Your voice can be that voice that causes more change.  Even if it’s just 15 min a week.

How to best use your activism time? 

If you have a lot of energy, get with other groups and help them organize.  Figure out what issues to address and how to address them.  Then get the message out.  However, most of us have jobs that make doing all of that difficult.  (DH and I are mostly lending support on this front, though we are trying to find a group to be active with!)

If you only have a little time or a little mental energy, do one of two things.

1.  Check in your area to see if there’s an indivisible group in your state that is organized enough to have a mailing list or online webpage of weekly items.  This is ideal for you because they will be covering state and local issues as well, and your voice has a lot more power, even if you’re gerrymandered, on state and local issues.  And, of course, state and local affects federal.  There may not be one in your city, but check the biggest city in your state and the most liberal city in your state to see what their indivisible group is up to.  You may also have an indivisible group in your district.  Many of these smaller groups are going to die from disuse, some will merge, etc.  But if they’re giving action items each week you’re golden.

OR

2.  If 1 isn’t working out for you or if you want a sure thing, go to our activism tab and pick one of the (now 5) different list-serves of action items.  My favorites are still Actions for Americans and Wall of Us, but they all have their own styles and you may prefer a different one.  After having done that, pick which 15 min you’re going to use to do phone calls (Moral Mondays are a good time) and do their items using their scripts each week.  If you don’t want to talk to a staffer, do it after hours and leave messages.  If you want to make the most impact use a more combative script if your representative is making a bad decision.  If you have extreme phone phobia, fax instead.  Get that box checked and if you have more energy, make some noise while doing it.  Most of us will probably have brief and polite conversations where we read off a script and the staffer says “Thank you I will pass that along”.

Next weekend I’m going to the women’s march in the city near me.  Is there one in a city near you?  If so, there may be bus transportation.  Several of our local churches have buses and our local dems office does as well.  If you call, you may be able to reserve a slot.  Men are included too– my whole family will be going, even though the shirts I got for the DCs are too big.

And now for some links.

If you’re calling and the vm box is always full and you can’t get through to a person, tell David Yankovich.  Stonewalling is illegal and he’s doing a story on it.  In retrospect, I suspect this is why one of my senators’ aides kept me on the phone for 30 min the other morning.  (Note:  You do not get the 30 min response unless you’re combative with them which I was because they were spreading falsehoods about the ACA– so don’t let that keep you from calling and voicing your opinion!)

You can call the leader of a senate committee even if you’re not a constituent in that senator’s state.

Interesting Times Suck.

Federal bill introduced in the house to prohibit abortions at the time of heartbeat.  Kentucky also enacts bad anti-abortion legislation.

Breitbart alumni are creating a pro-fascist group.

There’s a lot of Republican hypocrisy on Obamacare.   Also, one of my senator’s current lines is that the ACA shouldn’t have been passed without GOP votes.  I told one staffer who tried to push this harder that made total sense and that the Republicans should stop voting on partisan legislation RIGHT NOW.  If they can’t get full democratic buy-in, then they shouldn’t be passing any laws.  He was a political science major and I’m a lowly economist so I deferred to him on that one.

My senator’s staffer told me that hospitals are closing because of the Affordable Care Act.  That’s not true.  And more rural hospitals will close if the ACA goes away.  The only part that’s true is the effect of decreases in Medicare payments which were put in mostly in an attempt to get the GOP on board with the ACA.

Similarly, why did insurers withdraw from state marketplaces?  Because the GOP did things to get that outcome.  GOP who support these things care about politics over people.  They’re willing to let people die in order to gain political power.  And one wonders why I’m beginning to believe that evil exists.

What health policy experts think of Lamar Alexander’s plan for O’Care transition.  The answer may not surprise you.

A TX congressman calls for silencing of the press.  Let’s vote out the fascists.  I want to see primary challenges in Red districts.  Republicans against fascism!

Map of Trump’s Russian Connections.

Stories to watch.

Congress passes rule to allow house members to hide records from ethics probes.

Trump national security pick is a serial plagiarist.  (The linked story is an early one from this week, later stories find her dissertation and other articles.)

Trump has more debt than expected.  Breathtaking conflicts of interest.

Pay black women.

What it’s like to be at the center of a fake news conspiracy.

Presidential reading.

Trump vs. Plato.  Indeed, this seems to be the strategy of one of my senators’ offices.  They tell me so many lies when I call (and when DH calls and so on).

Poe’s Law?

Mommmma

Who is in a bubble?  What is the real bubble?  Who are the elitists?

When smart people get politically active you end up with something like this.

Do they want us to get into a war with China?

Mystery dot for twitter

Obama successes in tweetstorm form.

Gigzig is a fun way to come up with career path possibilities.

We have a potty tag.  If you have small children and are interested in the science of potty-ing.  Or just reading potty jokes.

Wall E

Ask the Grumpies: How to teach organization and time management to a middle schooler.

First Gen American asks:

How [does one] teach organization and time management to a middle schooler.

We have had some luck with putting a checklist on the fridge that DC1 has to go through every night, but it isn’t foolproof. If it were, DC1 would be getting an A in orchestra because zie wouldn’t have forgotten to log hir practice.  How do you remember to practice but not remember to log the practice?  It boggles the mind.

Does anyone else have more/better suggestions?