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Michelle Singletary, "Big Mama used to say it's not how much money you make that matters, but how you make do with what you have"

Questions & Answers

Kids & Money

Question:

My husband and I are expecting our first baby this March. We don't have much extra income each month, but both of us feel strongly about saving for this child's college education. I'm guessing you'd recommend a 529, but what's a reasonable amount to put in each month? (By the way, we just paid off our last debt and will have a 25% down payment for a house we hope to buy this year! Needless to say, I agree with you on nearly everything!)

Answer:

I would recommend a 529 plan. And go online and you can find any number of calculators to help you figure out how much to put aside each month.

I see you are from Md. look at the Maryland 529 plan managed by T. Rowe Price. I'm sure they have a calculator. And here's a bonus. In Maryland for each 529 account you get up to a $2,500 state tax deduction (if you invest that much). I do. Got three rugrats to put through college.

Question:

I am a new mom, and I am wondering about good, inexpensive toys for an eight-month-old? I want things for her to play with, but don't want to break the bank.

Answer:

Pots and pans. Seriously.

With my first kid we bought all these nice toys (not a lot but some). My daughter -- now 12 -- wanted to play with the boxes the toys came in and she would crawl into the kitchen and pull out the pots and pans and bang on them. In fact, we lost our house keys because she found them and put them in a pot in the back of the cabinet.

At that age, you don't need to spend a lot for toys. You might also look at Goodwill or ask friends for unused toys.

Question:

I understand that one of your mantras is "Priorities lead to Prosperity. How far do you go in relating that [mantra] so that they understand spending decisions?

Answer:

You go as far as it takes to get your kids to understand that in life you have to make choices. Most of us can’t have it all. So you budget for what you can afford. I talk to my kids ALL the time. They are 12, 9 and 7. Even the 7 year old knows about her college fund and at times says she's not going to spend so it can go into her college fund.

When they whine about wanting something at the store, I use that opportunity to say, “If I give in to your every want, we won't have the money to take the nice vacations you like.” Then I say, "Don't you like traveling every summer to nice places?" Then I remind them of all the fun things we did.

They still whine and I say, "Well too bad. This is how it's going to be."

Explain with love. Laugh at their crazy demands. Then in the end do what you know is best. Trust me they do get it. Maybe not right then but they do. But you have to be consistent!

Question:

My daughter will be graduating from elementary school and moving on to middle school next year. The middle school has pretty low test scores and has a reputation of having some rough kids. At the same time, the principal has recently won awards and the school has a nice diversity and a few of my daughter's friends will be going there. Many people I know are forking out at least $100,000 to move to comparable houses in other parts of the county where the schools are perceived to be better. I would be financially strapped if I did this, but it is manageable, possibly.

I know you're big both on getting a good education for your kids and being financially responsible. Where do you fall on this question?

Answer:

I ALWAYS fall on doing what you can afford and not possibly.

I'll be honest I have all three of my kids in private school. BUT my husband and I evaluate that decision every single year and weigh it against our financial situation. If the money gets tight or we couldn’t also save for the college education we would put them in public schools. And if we did you better believe we would be in that principal’s face, or getting them tutoring, etc. to make sure they aren't losing out.

Unless otherwise noted the questions were answered by me in recent online discussions on www.washingtonpost.com.