Wednesday, June 19, 2013

How to Save for Your Child's Education AND a Vacation on a Budget

5-6 weeks worth of change
My husband and I have worked out a financial plan that will get us out of debt at a very fast pace. It has required some sacrifices, has taught us a lot about what is important and how to be more self-sufficient, and how to live with less, happily. There have been a great deal of unexpected benefits to our system. One such benefit is that we have an easy system for saving for our boys' future education, and either a vacation or vacation home. This system doesn't require any planning, no financial changes, and is the easiest idea to implement that we have ever had!

Here's how you do it: The only rules are that you live off of cash ONLY, and that you DON'T spend the change you accrue. That's it! We have set up an easy-to-use system that works wonders for us. We put a jar in a safe, hidden, and easy to get to, spot. Everyday, we empty our pockets, wallets, and bags of change, and put it into the jar. When the jar is full (it usually takes us a month to six weeks), we count it, sort it into three even piles of change, and disperse the funds into two piggy banks (for the boys), and the last third into a large container which will be our future vacation fund. When the piggy banks get full, we take them to the bank and deposit the money into our sons' bank accounts.

Sorting and counting
It may not seem like a great way to save for such expensive plans, but these plans are long term, and this system isn't as restrictive as signing the boys up for college funds or savings plans through companies that offer such things. We are chipping away slowly, but our boys are three and 5 months, so we have a long time to build up the money. I'm sure we could cut out the vacation/vacation home fund, if we wanted to, but we like the idea of having a family "reward" at the end. It's great motivation!

 It's also a great way to teach our boys about money, budgeting, planning, monetary values, counting, etc. We have made sure that Liam has been a part of every step in this. He helps us empty our pockets, puts the money in the jar, counts the money, puts it into the various banks, and helps us take the piggy banks into the bank when the time comes. I know he's learning great lessons, and so are we.

Depositing the $ into the "bank"
I like that this plan is painless monthly, and it works! Just this time around, we inherited $36 worth of change, that means $12 per "account"! Last time, it was even more. If we were to save just $10 a month per designated fund, we would end up with a $1,200 in EACH account in 10 years. All without missing a cent! Of course, we will probably supplement and add more money when we can, but this is a great way for us to continue to plan for these life events, even while on a tight budget.

Happy saving!

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