[Music] All right, Brian. This next one, this next question is from Ben. Ben says, How do you come up with a target for 529 College savings for a child? I have a one-month-old. Congratulations! I don't know how to account for school choice and the probable increase in college costs over the next two decades. Brian, I love it because as you sit here, you have a student in college that at one point was one month old, and at some point, Young Money Guy Brian Preston had to decide, How am I going to project this? How am I going to think through this? And how am I going to tell clients how to do this? What's your answer? How can Ben go about navigating this? So, Ben, I'm going to tell you, first, we'll give you the ground rule part that obviously you need to be saving and investing 20 to 25% for your future retirement before we're loading up your children because it's just like they tell you on the airplane when they're going through all the safety

protocols put your oxygen mask on first before you help out the kiddos. Well, 529 is the same way. Now, here's what I did, and it is true. I have a daughter that I moved her in this weekend for her junior year of college. That's crazy that she's already a junior. And here's what. So, the state of Georgia, when I was, um, when molus was born, and we lived there, they had a tax benefit that if you put in $2,000, um, they would give you um, a state tax deduction. So, that's a guaranteed 6% right there. Um, so I started doing $2,000 a year for each of my kids. A few years um, later. I mean, it was actually quite a number of years later for my oldest um, they pushed that up to $4,000. And then they pushed it up to 8. I think we moved out of the state by the time it was eight. So, the most I'd ever gotten was up to $4,000.

year, and I'm happy to say that, um, me and oldest. We just cleaned out that, that her, her account for her third year MH. So, that just doing that modest sum, that $2,000. It was amazing how much it grew, um, and worked. And she got some scholarships. I got to give her credit as well because she did her part, got a scholarship that covers 60% of the, the tuition U and fees. But, um, I was happy to say just saving at that modest level, um, covered three years of her four-year degree. So, doesn't have to be a ton, but I would say now, look, that's me, you know, it's better to be lucky than good sometimes, and that ties into what we even started, um, the whole show about. But it is, I, if you want to put some math behind it, um, I think you can go look at, you know, State institutions or private institutions that you're interested in, back into the math of, you know, use a, a very moderate conservative because and

you can use a lot of age-based programs out there. That's what I did with my daughter. So, it's very aggressive in these programs, and then as they get closer to actually needing the money, it's got its own Glide path down into conservative Investments. Yeah, I think a great thing you can do is just like you said, you can either go look at specific universities that you think that your child might be interested in, and you can go. It's very easy to go. You can go to savingforcollege.com, or you can actually go to the individual University websites and see, Okay, how much does tuition cost? How much are fees? What's room? What's board? and get sort of an all-in cost present year and say, Okay, if my kid's one month old today, and I want to think, 'Okay, well, College costs are going to inflate to some degree,' now you got to figure out what number you're going to use, but you can inflate it from the cost that is today all the way out to the cost you estimate it's going to.

be at 18. You say, Okay, well, if I need that for four years, that's my Finish Line. That's the number I need to move towards, is our goal. And this is where you and your spouse will need to sit down and talk. Is our goal to pay for 100% of college? Is it to cover 75% of the cost? Do we want to make sure that we can cover three years but not overfund? And then how well are we doing saving for our own financial future? And once you define those things, then you can figure, Okay, maybe our answer, hey, 100 bucks a month, or get us there, or Maybe it has to be 250 a month, or Maybe we can only do $40 a month. But if we start now, it's going to be a meaningful sum that will at least give you an idea of what you are moving towards. And then what's great about all Financial plans is as you move through time, you're going to be able to adjust and control. Like you're going to recognize at some point, Hey,

okay my kids are probably not going to go to an Ivy League. That's not what they're interested in. Or, hey, my kids are probably going to go to a local community college, or they're going to go to public school. And you can adjust the strategy accordingly, but that at least will give you sort of a horseshoes idea of what mark are you shooting towards and what's realistic for your family situation. Um, I have one more tip for Ben. This is probably 10 years in the future, so this is just, you know, earmark this and come back to it in 10 years. But when your child actually starts showing an interest in money, or you're at least trying to introduce them into the money, don't keep this account as a secret. You know, this could be, I've told you guys, when they start working their first job, hopefully it's like fast food or food service while they're in high school, so they'll know how crazy the general public is. Um, start doing some matching funds into that custodial.

Roth IRA, but even before that, you could show them a 529 account statement, show, Hey, 10 years has been invested, look how much it's grown. This is why we need to start having conversations now on what do you know, begin with the end in mind, what's your major, what do you think you want to do, no pressure, because look, I didn't know what I was going to be when I got into college, but we do need to start thinking about how much the colleges cost, you know, how student loans, you know, you need to make sure when you graduate your student loan is less than what your first-year salary. Start those conversations now so that you can raise children who are not scared to death with how money works. I mean, that's something that I always tell people. They say, What can I do with my children? I'm like, Involve them with the process. And like, Yeah, but is it scary to let your kids know that this money is out there? And I'm like, Well, first of all, $529 not

exactly the easiest thing for them to get access, and the second thing is you're going to thump them on the ear before they try to take any of these custodial accounts or other things, because if you raise them right, I think that you know it's better to have the conversation than just to stick your head in the sand and assume they're going to be good with money. You need to model the behavior, share the behavior, and educate the behavior. I love it.

How Do You Project College Costs and Set a 529 Savings Goal?

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