Thursday, September 28, 2006

Step By Step Plan To Finance College For Any Baby

I have been hearing a lot about the cost of college and the amount of debt that students are graduating from school with and how this is affecting their finances throughout life. What I find is amazing is that anyone reading this can follow my plan and have their entire college education paid for (or at least a huge portion of it) with very little time or effort. This is my simple plan that has been working wonderfully for me and I believe can work for anyone to create a nice college nest egg by the time you're eighteen years old.

This month I will make over $200 in advertising and I expect to continue to earn that much for the foreseeable future (and in fact believe it will grow as time goes on). Even if it doesn't increase any more, nobody gives another college funding gift to me and I don't earn a cent of interest in the next 17 years, I'll still have about $45,000 for college when it's time for me to go. With interest, increased earnings and gifts from family and friends, I expect to have well over $100,000. The great thing is that anyone of you can have it too if you do the following simple steps:

As soon as you know you're going to exist in this world, start a blog (I consider myself a late starter at 4 months). This doesn't cost a penny if you do like have done and begin the blog on a free service. For long term, you might want to consider getting your own domain (something that I'm considering at the moment), but this is certainly not necessary at the beginning.

Choose a topic to blog about in addition to being a baby. The topic should be one that both you and the person that will be helping you (you may need a bit of help until you get your hand / eye / typing coordination down) enjoy so that the blog will be updated on a fairly regular basis. Then simply start blogging about you and get your opinion out into the blogoshere.

Once the blog is set up, take some time to place ads such a google adsense on your blog. Earmark any money earned through this advertisement medium to go directly toward your college fund. Also set up an area in your sidebar where you can sell advertising text links to advertisers.

Find blogs that you enjoy reading and that have a similar topic to yours and trade links with them if possible. This will help people know that your blog exists and help it get better indexed in search engines.

These are the basics to getting your blog off the ground and putting in place a system where you can begin to earn a fair amount in advertising that will go toward your college fund. It is also a wonderful place to update family and friends on what you're up to and the things you're thinking about.

In addition to setting up the blog to help with college expenses, I would also highly recommend taking the following steps to help increase your college fund even more.

  • Tell all family and friends that what you really want for special occasions such as birthdays and at Christmas is a small monetary donation for your college fund.
  • As you outgrow your baby things, have your parents sell them through Craigslist or on eBay and have all earnings from them go toward your college fund.
  • Sign up for programs like Upromise that will give you free money toward your college education for everyday purchases you make.
  • Take advantage of all the free and discounted things that manufacturers give to babies and place the savings into your college fund.
  • Wednesday, September 20, 2006

    The Value Of Money - Museum Program

    I always get a smile on my face (and clap my hands - I'm really into clapping my hands at the moment) when I hear about programs that help to teach children more about money. What could be better than a museum that set up a program specifically to teach children about the value of money:

    As part of the "A.G. Edwards - The Value of Money" field trip, grade- school children will learn valuable lessons about money in a fun environment, as well as key money management lessons, including:

  • How to add coin and dollar values and make change in a game of "What's My Change?"
  • How to budget, be a wise shopper and manage money through everyday math skills
  • How to gain insight on basic saving and investing principles
  • How to write a check

  • Wouldn't it be great if all museums would set up similar programs for kids to go see and learn?

    Sunday, September 17, 2006

    Coverdell Education Saving Account Changes

    I mentioned earlier that 529 plans had their federal tax deduction permanently extended which nice since it helped those investing in 529 plans to feel more comfortable and not have to worry that these deductions would expire. Unfortunately, the rule changes for education accounts aren't always positive.

    For those that have Coverdell Education Saving Accounts, one of the nice advantages is that the money in the accounts can be used for private elementary and high school expenses. Beginning in 2011, this will no longer be the case. Coverdell funds will no longer be able to be used for elementary or high school tuition or related expenses. The money invested in Coverdell saving accounts will still be able to be used for college.

    Those who were planning to use their Coverdell account to help with private primary education will need to figure out a new strategy. If you choose to use the Coverdell funds for the private primary education from 2011, the money will lose its tax-free withdrawal status on the earnings and a 10% penalty will be imposed.

    Wednesday, September 13, 2006

    More States Offering 529 Tax Breaks

    For may of us young ones, there is more good news regarding 529 plans - more and more states are giving tax deductions to these saving devices as shown in this usatoday article:

    Pennsylvania, Maine and Kansas have approved such tax breaks, and a handful of other states are considering similar measures. Previously, these states offered either no tax deduction or a deduction only if a resident contributed to the state's own 529 plan.

    But for all my peers living in states that don't currently have, or are planning, state tax breaks, don't get your hopes up. There is a significant tax income loss when the breaks are given that will keep a number of states from offering them.

    Saturday, September 09, 2006

    Little Grad Apology

    I received an apology from Little Grad for spamming this blog which makes me feel a little better about the company. Little Grad is a company like Upromise where you can get cash placed into a college savings plan by purchasing items through retailers that are affiliated with them.

    When I first began writing here, I kept getting post from them telling me how great their site was and how I should check it out. The first one was fine, but when I started to get more saying basically the same thing and always a link for me to check them out, I decided it was spam and started deleting them. It got so bad that I had to put the function in where I must approve all ads before I let them get posted now.

    I do give them credit for their honesty and that they have stopped encouraging their employees and users from doing so. here is what I received:

    Dear Financial Baby Steps,

    A friend sent me your post where you expressed being upset at Little Grad for spamming your site with overly zealous/inappropriate endorsements.

    I'm sorry this happened. Just to briefly explain why it did; when the company was new, we encouraged new employees and some of our more enthusiastic users to spread the words. (I myself posted once, as I think your site is delightful.)

    We've since asked employees and friends to curtail this practice. I wish you continued good fortune on your blogging and other endeavors.

    Suzy DeLine,
    Little Grad

    While it doesn't justify the spamming in the first place, it's nice that they admitted their wrongdoing and apologized...

    Friday, September 08, 2006

    529 Plans

    While I'm still not sure that a 529 plan is right for me, it is a good plan for a lot of people. One of the most difficult parts of it is trying to figure out the best plans. Savingforcollege has a ranking system for all the 529 plans giving them 1 (lowest) to 5 (highest) caps. This might be a good place to begin your research of 529 plans.

    In other 529 plan news, many people were wary of them because the federal tax deduction was set to expire in 2010 and while most people felt that it would be renewed, there was always a chance that it wouldn't be. This is no longer a worry as the Pension Protection Act of 2006 makes the tax benefits for 529 plans permanent.

    Saturday, September 02, 2006


    It's hard to believe I've been blogging for a full year! I think I'm the first blog to be featured at blogoversary which is kind of neat (maybe I'll become a trivia question some day).

    A lot changes between being a month old and being a bit over a year old. First and foremost, I have hair! I'm also now mobile. No stopping me. If I want to walk somewhere, I can get there on my own. No more crawling or being carried (okay, I still do crawl sometimes, but that's our secret). Food has changed a lot (no more mom's milk and I get to try lots of interesting new foods). And my college saving account has been slowly and steadily growing.

    I'm sure that there will also be a lot of changes in the coming year and I'm looking forward to recording them here in the year to come.

    My Net Worth - August 2006

    It's been awhile since I updated my net worth, so I felt it was time to go through and bring everything up to date. I passed the $4000 net worth mark this month and I continue to increase my net worth by about 4% a month.

    Since my uncle has moved back to the US, I need to have him move all my cash holdings into some type of investment. I had a talk with my mom and a 529 plan I don't think will be a good option for me. Since I-Bond Rates have fallen, I don't want to place any more money there and in fact, will be withdrawing the money I have in I-Bonds next January. So the question is where to place it? Figuring out where to place that cash will be my goal this month.

    I'm feeling pretty confident with my blog. Even though it is nothing huge or popular, it is still generating $150 a month consistently and looks like it will continue to do so for the foreseeable future. I think I would like to figure out how to earn a bit more and will have a talk with my uncle about other possibilities.

    I think I'm still in a good spot for my age and hope to continue to grow my net worth in the months to come.