Sending Three Boys To College – My Decade Plus Journey

Saving for college

On Monday we kicked off the new year talking all about money, and I mentioned my college funding goals for my three boys. Today, as promised, I’m going to do a deep dive into my college savings strategy and experience over the past fourteen or so years.

My three boys today are 14, 10, and 2 – and so were born back in 2003, 2007, and 2015, respectively. Back in the year 2003 I was just two months out of college myself, the experience of working full time and going to school full time fresh in my mind. I was only 23, and we were pretty broke. For many years we qualified for the Savers credit, in fact, a tax credit provided to help lower-income people save for retirement. I only made $35k a year when he was born, and my husband took a part-time evening and weekend job so we would have someone at home with the baby at all times. We couldn’t have afforded daycare, so this was the best option, but it put our combined income below $50k for a long time.

Despite this, I still wanted to help my baby go to college one day. I knew I might not be able to help much – college costs were already huge and rising quickly – but I also knew that something would be better than nothing. And who knows? Maybe my financial situation would change at some point in the future, and I would be able to help more than I thought.

Yes, this baby turned into a teenager.

Little did I know at the time what the next 14 years were going to bring.


So I scrimped, and saved, and saved some more-and in 2004, when he was still one year old, I opened that first college fund at Vanguard with what at the time was the huge sum of $3,000. And I’ve added to it every year, sometimes more, and sometimes less as life happened, but consistently. Today I’ll talk to you about my real investments, returns, and account balances. It’s a story of small, consistent investments over a long period of time yielding a considerable chunk of money.

But Why?

First, though, let me talk a bit about why I’m putting this out there. For years all I read about saving for college was generic advice. It’s either yet another financial media person talking about how you shouldn’t be bothering to save for college because you’re probably behind on retirement, and how “your kids can get loans for college but you can’t get loans for retirement”. Or how you need to pay off debt and save an emergency fund before you start putting money aside for retirement.

But what about if you don’t have debt, you have an emergency fund, and your retirement is on track? What then?

Or sometimes I’ll read information from very high-income individuals who save and invest hundreds of thousands of dollars for their kids to go to Harvard or Yale. That’s great, but I don’t have the income to do that. I make a good income, but not enough to superfund a 529 at $70k or stash tens of thousands before my kids were born. Or even reach the gift limit of $14k per year, although I hope to come close once my mortgage is gone.

So what do real people do? Ordinary people who start saving when their kids are small? Or who make a good income now, but spent years as a low earner? What does it really look like to save in a tax-advantaged account for many years?

Since I can’t find that kind of information online, I thought I would write about my personal experience to share with all of you. Hopefully you can see the power of small investments and compounding over a long period of time, and use this information to make your own decisions on what you want to do for your kids (or nieces/nephews) for college.

What Years Of College Savings Looks Like

All right, here it is in all its glory – the story of many years of saving and investing for college. Lets start with an overview of current balances for my three boys, just of their 529 accounts. NOTE – they have other types of accounts that will be used for college, but I’m going to focus on the 529s today. Yes, plural. They each have a 529 at Vanguard and one through CHET, the Connecticut state 529 that provides a state tax credit for up to $10k in contributions each year.

Vanguard CHET Total
Nick $28,199.37 $15,398.46 $43,597.83
Nate $21,998.81 $9,412.47 $31,411.28
Alex $5,453.74 $8,709.22 $14,162.96
Total $55,651.92 $33,520.15 $89,172.07

You can see that each of them has a different amount saved, because their goals are on very different trajectories in terms of time horizon.

So how much in contributions did I need to put aside each year to reach these sums? They look huge to me-much more than my yearly salary back when I started that very first account. I think you’d be surprised at what the contributions look like, especially for the Vanguard funds. There was no superfunding involved, no $14k per child contributions, and no huge gifts. Instead I, and some of my relatives, put aside money. I contributed monthly (except the year after my husband almost died of sepsis) and my relatives would give small gifts occasionally for birthdays and Christmas.

Now I can only find statements on Vanguard online going back to 2005, but I believe I opened the account for my oldest in 2004. So this look back will only go 12 years. You’ll be able to pretty easily spot the year of my husbands medical crisis, I bet.

Nick – 14 Nathan-10 Alex-2
Contribution Year end value Total Earnings Contribution Year end value Total Earnings Contribution Year end value Total Earnings
2005 $4,650.00 $4,965.05 $315.05
2006 $725.00 $6,393.22 $1,018.22
2007 $600.00 $7,466.37 $1,491.37
2008 $900.00 $6,053.83 -$821.15 $4,050.00 $3,119.54 -$930.46
2009 $1,200.00 $8,804.41 $729.41 $1,200.00 $5,271.48 $21.48
2010 $1,200.00 $11,082.35 $1,807.35 $1,200.00 $7,302.03 $852.03
2011 $1,200.00 $12,549.52 $2,074.52 $1,200.00 $8,442.27 $792.27
2012 $400.00 $14,271.01 $3,396.01 $400.00 $10,014.70 $1,964.70
2013 $750.00 $16,751.62 $5,126.62 $750.00 $12,512.45 $3,712.45
2014 $1,800.00 $19,684.40 $6,259.40 $1,400.00 $14,793.50 $4,593.50
2015 $1,900.00 $21,534.03 $6,209.03 $1,400.00 $16,106.95 $4,506.95 $3,150.00 $3,992.69 -$57.31
2016 $1,850.00 $24,338.06 $7,163.06 $1,250.00 $18,395.92 $5,545.82 $650.00 $4,022.13 $222.13
2017 $1,800.00 $28,199.37 $9,224.37 $1,200.00 $21,998.81 $7,948.81 $600.00 $5,453.74 $1,053.74

You’ll notice a few things, if you look closely:

  • Other than the year I started the accounts (due to the $3k minimum), I’ve contributed less than $2k per year. Many years much less, especially in 2012/2013 when my husband almost died and I cleaned up our financial act
  • There are several years when I’ve had negative earnings. The most notable example is of course 2008, but even in 2015 they all lost money
  • Total earnings is right around $18k. If I had paid 15% capital gains tax on those earnings, I would have almost $3k less across the board. And of course I still have a while to go, so I expect/hope the earnings to go up
  • In case you missed it, 2012 was the year my husband went into septic shock. I was able to re-start contributions in 2013 after we were financially stable again.
  • When you start an account matters. Even though the total balance for my middle son is about $7k less than my oldest, the total earnings are only about $1300 less. Why? Because I started his account in a down year, while my oldest son was started before 2008. You’ll notice that the TOTAL earnings for my oldest went negative in 2008. That means that every dime I put in before that lost money.

Back in 2015 I decided to open a second 529 for each boy, to capture my states tax deduction for their 529 plan. In this plan I’ve contributed more than the Vanguard plan, so the balance has risen faster. This has also been where my families birthday and Christmas 529 gifts have been made. Since becoming debt free other than the mortgage some years ago (check out Part 1 and Part 2 of that story), we’ve had more cash flow every month to make a larger total contribution each year. Also, my little guy was able to tap into some benefits that my older sons could not–namely our states “Baby Scholars” program. We were able to get an additional $250 in contributions from our state for (1) opening an account before he turned one and (2) a match for contributing at least $150 before he turns four.

Nick – 14 Nathan-10 Alex-2
Contribution Year end value Total Earnings Contribution Year end value Total Earnings Contribution Year end value Total Earnings
2015 $3,300.00 $3,275.18 -$40.52 $3,300.00 $3,268.28 -$47.91 $2,150.00 $2,111.76 -$38.24
2016 $4,125.00 $7,780.17 $355.17 $3,075.00 $6,709.26 $365.92 $3,175.00 $5,679.17 $392.41
2017 $6,655.47 $15,398.46 $1,317.99 $1,821.76 $9,412.47 $1,215.71 $1,971.76 $8,709.22 $1,412.46

A few things to note here:

  • The first year was a down year, which bodes well for future contributions
  • Total earnings for my oldest are less than the little guy, despite a much higher level of contribution. Why? Because funds for my oldest are invested much more conservatively. I only have a three and a half – seven and a half year time horizon for my oldest. The little guy has 16-20 years to go.
  • The contributions are all over the place. The addition of the state match for the little guy, and slightly more 529 gifts from family for him (because he frankly does not need toys for birthday/Christmas) have led to a higher contribution. They are also heavily skewed toward my oldest son, because I need to catch him up before he starts college
  • Our state offers a tax deduction for up to $10k in contributions per year. I’ve tried to hit that every year, although the distribution between the boys has changed as I’ve evaluated where I stand in relation to my goals.
  • At about $4k in earnings between the three of them, I’ve saved about $600 in capital gains taxes if I were to sell today. I’ve also gained another $1,800 in state tax savings and earned $250 in matches for the little guy. So in total I’ve gained $2,650 in benefits on slightly under $30k invested, or about 8.8%. Not bad.

An Analysis Of Earnings

Another thing I did was take a look at what the 529 plan accounts earned vs. the S&P500. Why? I was interested to see whether investing into the 529 was a good strategy when compared to just putting the money into an index fund. The results were very interesting.

In every year their 529 plans lagged the S&P 500.

Now this isn’t exactly a fair comparison-the funds are invested in stock/bond splits, so of course they’re going to underperform the stock market. But then they should perform better in a down year, right? Sadly no, in down years they also underperformed. And when the S&P was slightly up in 2015, their accounts were down across the board.

It’s difficult to do a direct comparison. Since these accounts will be tax-free, I don’t need to pay any taxes on capital gains. If I were in an S&P fund, there would be dividends and short/long term capital gains to pay. I also get that state tax break, and at the 6% tax bracket, that’s an extra 6% return in the year I make the contributions. For the Connecticut 529, I’ve gained 8.8% in benefits on top of my contributions, and the earnings are gravy on top of that. For the Vanguard ones, I don’t get any benefits except the tax break on the 529 itself.


If you’re interested in learning more about saving for college, the Vanguard or CHET funds, or seeing some other great things I’ve written on the subject, here’s an awesome list of resources for you.

Wrap Up

Hope you enjoyed this peek behind the curtain on what it’s really like to save and invest for college over a long period of time. Although in recent years we’ve been able to invest more heavily into the CHET fund, I’m most proud of the Vanguard fund. Looking back, I can remember that in 2003-2005 I had a little baby who I dreamed of one day helping to go to college. I was sitting at my computer desk at my condo I purchased when I turned 20 (and made $65k on in just a few years) wondering how on earth I was going to be able to do that. I had just finished college and started my career, my husband was working part-time nights & weekends so someone was always home with this baby, and combined we did not make much money at all.

Today that baby is a 14 year old teenager sitting next to me on the couch as I write this, playing a video game he purchased with his allowance at an after-Christmas sale. I haven’t finished saving for college for him, but I’m well on the way-and light years ahead of where I thought I could get by now. The ups and downs of that Vanguard fund show the very real impacts of life and earnings on saving for kids college, but despite everything that happened, I never gave up. And today that fund, along with the other ones I’ve accumulated, will one day be able to help him launch his own dreams.


Let me know what you think – are you also saving for college? Or was this an interesting look at compounding over time? Let me know in the comments!

Want to learn more about teaching kids about money? Check out this great page with my top articles and resources I’ve found from around the web.

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18 thoughts on “Sending Three Boys To College – My Decade Plus Journey”

  1. jumpstartfromscratch

    I’ve read so many articles that are too vague and generic to be useful. I really appreciate the transparency of all your real numbers, and young parents will benefit from this story. It is an example of how doing the right thing over time can have great results.
    I think one of the most important steps was just getting started, by opening the accounts. Separating and earmarking the money in dedicated accounts is crucial.
    I have always hated that saying about how it is possible to borrow for college, but not retirement. One of my unfinished posts is about useless those words are.
    My post that I’m publishing Monday pairs pretty well this post. It includes numbers that are clean, neat, and theoretical. I think your post is more interesting because your numbers are messy and real, from events in your life. Great job on the post, and on the progress toward this wonderful gift for your kids.

    1. chiefmomofficer

      Glad you liked the post. And I agree that most advice is too vague to be helpful, or scenarios are too perfect to be real. The most important part is to just start with something. I also wrote a post before about the whole “you can’t get loans for retirement but your kids can get loans for college” thing. It’s not really true-the government expects you to contribute to college (assuming you have a good income), and if you don’t have savings they will make you co-sign loans. Plus, as you can see here, small amounts do add up over time. Looking forward to your Monday post!

  2. I completely agree with JumpStartFromScratch… seeing your transparent numbers is really helpful, especially for a newer working mom like myself! We have a small 529 with Vanguard that we throw extra gifts into, but your recent posts have made us rethink a bit and has inspired us to re-look at our savings plan 🙂 I’m really impressed with your savings… thank you again for sharing!

    1. chiefmomofficer

      Glad it’s helpful! It took a while to pull together, because I had to go through over a decade of statements. But you can see from my example that those small amounts over time really do add up. Even if the “real life” of contributions and investment returns is messier than they show in books. 🙂

  3. This is so heartening! We are in the same boat of only being able to do a bit at a time–no crazy maximum contributions here. And yet, you’re going to make it! In fact, you are above and beyond where we even aspire to be!

    A question: you mention that if it had been in an S&P, it would have performed better, and having some bond allocation. Is that because they’re in like a target year fund? I’m self-designing (we have Vanguard funds in our state 529 plan, woohoo!) But the asset allocation is the part I struggle with, since it’s on a much-expedited timeline from retirement.

    1. chiefmomofficer

      Yes, they’re in target date funds. I would definitely look closely at the allocations, because as you say the timeline is expedited. You can be pretty aggressive starting out but you’ll need to make sure to manually switch over to more conservative options when you get closer. If that return in 2008 was the year I needed to spend the money, I would have been in trouble. It’s great that you have Vanguard funds as options in your state plan! We don’t, but the TIAA CREF options we do have outperformed Vanguard the last three years (which really surprised me). I’m glad this was helpful and heartening!

  4. Loved this post. Mine are 10 and 13. College funds and healthcare are the two biggest unknowns for the parent FI community. Liked your summary and breakdown of the 529s.

    1. chiefmomofficer

      Yours are right around the same ages of my older two boys! I agree that college and healthcare are two big unknowns that concern me. I have a plan for college, though, and healthcare is something I think I’ll just need to figure out when I get closer to retirement. So many unknowns at this point in time, predicting the future is nearly impossible.

    1. chiefmomofficer

      Enough to pay for my in state flagship public college (UCONN)-tuition, room, and board. It’s about $100k per kid total.

  5. Thank you for sharing this, and BLESS YOU for the amazing financial commitment you put into your 3 boys!

    You will be setting them up with a gift that so little receive in this life, and I know how thankful they will be for it!

    Keep up the great work!

    1. chiefmomofficer

      I sure hope they’ll appreciate it, Sean! One day I’d like to show them how I did it, so they can see that small amounts saved and invested over a long time really do add up.

  6. I love that post. I have one kid, 9 years old. I have slightly less than 9000 dollars invested in a vanguard 529 account. If things go according to plan, it will have about 40,000 dollars by the time we retire. It will then have five more years to grow.

    We are trying to get to early retirement in about 5 years, and haven’t really accounted for his college expenses. But then retirement won’t be completely zero income for us. Whatever we earn then would go towards his college.

    I have no idea how this is going to work out. I don’t want to leave my job when staying a year or two longer would pay for his college while quitting would give him a lot of debt. Best case would be a state college 🙂

    1. chiefmomofficer

      I’ve decided that I’m willing to pay for a state school, so that’s what I’ve made my target for the boys. If they decide they want to go more expensive, I’ll work with them on getting jobs/scholarships to make up the difference. I’m hoping they won’t take out loans-from what I’ve seen, a lot of folks with loans for school struggle with them or regret taking them out. Sounds like you’re on a good track!

  7. Thanks for sharing! I’ve been hellbent on frontloading JB’s 529 and I just realized that it’s probably because I’m afraid I’ll have to go on disability if my health suddenly deteriorates too much to work, and leave zir high and dry. But it’s great to know that if we had to back off and go with slow and steady over the years, it’ll still bear fruit. Barring horrible timing with a recession, that is!

    1. chiefmomofficer

      Yeah, that Recession year was not the best. I shudder to think if that was the year I had to start withdrawing the money…

  8. Thank you so much for this post! It’s one of the first/only I’ve read about college/529 planning that includes actual numbers instead of theoretical assumptions. I am in a similar position as you in that I haven’t been able to contribute huge sums but have been saving since my 14 yo was a baby. The compounding does add up. I do have a question for you. At what point do you anticipate having the 4 years saved for your oldest? Or, put another way, if you don’t have your expected 100k/in-state cost saved by the time your oldest enters college, how long into his college journey do you project that you will need to keep saving?

    1. chiefmomofficer

      Great question! I expect I might need to continue savings throughout his time in college. So my time horizon isn’t just the next 3.5 years, but around 7.5 years until he finishes college. A key part of my overall plan is to have the mortgage paid off before he enters college-that way I can use the extra cash flow for college. And if I end up not having quite enough, I’ll work with my oldest son on helping to cover gaps. I certainly hope he’ll get some scholarships (in fact, he just got one for $2500 from our state! As a freshman! Exciting.) which should help, but I don’t want to count on it.

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