A College Savings Change

by Julie on November 19, 2013 · 5 comments

I’ve written a lot (a LOT) about found money and giving it jobs to do. And we’ve really used that technique to its fullest when it comes to college savings.

For a number of years now, my blogging/online earnings have been earmarked for my daughter’s college and put into a savings account at Capital One 360 for just that purpose.

And last year I started directing my bookkeeping income into a second savings account for my son’s college. (See: Giving Income Streams New Jobs)

Those accounts hold the savings for each kid until we’re ready to transfer $$ to 529s.

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But both kids are both seniors – Lindsey in college and Grant in high school – and things are changing a bit.

First of all, Lindsey’s done an excellent job earning scholarships. (See: How to Earn Scholarships for College: One Student’s Experience) As a result we won’t owe the university any money for her tuition or fees this year. So essentially we’re just paying her a set amount each month for rent and living expenses and we’ve been doing that out of earned income. In other words it’s just a “bill” we pay each month.

That being the case, it doesn’t make sense to keep setting money aside for her in a separate college savings account. So I’ve combined the two college savings accounts back into one.

FYI, opening individual savings accounts from your original savings account at Capital One 360 is so, so easy to do. See that little Add New Savings Account link with the plus in front of it below our list of accounts?

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And you can name your different savings accounts anything you want, which is fun and helpful when you’re saving for different goals.

Combining or closing accounts is easy too. To merge our two college funds, I did an online transfer of all of the $$ out of the 2nd College Savings account into the first one, and it asked me if I wanted to keep that 2nd account open for future use, or close it. I closed it since we’re done with that savings goal.

The whole thing took me about 30 seconds.

So from now on, both my blogging/online income and my bookkeeping income will go into that one college savings account earmarked for Grant. And that’s an especially good move because Grant’s college plans are still undecided. You can read that to meant that he may be choosing a more expensive college than his sister. ;)

I remember a family friend describing his son’s new job in finance to us one time and saying, “He moves money around all day.” On days like today when I’m opening and closing accounts I feel a little like that money manager.

I just wish my amounts were as big as his no doubt are. :)

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Kait November 20, 2013 at 12:14 pm

Julie: I created my own Found Money account this year based on your recommendation. Little checks here and there find their way into it and it works so much better than just leaving it in the checking account or cashing it and spending on whatever! I also took your advice and created other accounts. Each pay period I have a set amount go into a school/property tax account, a vacation account, and a car/home owner’s insurance account…college money goes right to the 529 account. This has really helped me to have the money ready when those large bills come in rather than pulling money from regular savings…it’s already ear-marked! Thanks for your great advice!

Julie November 21, 2013 at 10:57 am

Kait, your comment makes me so happy. Thank you for taking the time to share it. Isn’t it amazing how some simple changes can make such a big difference? Thanks for being a reader! – Julie

Jacob @ My Personal Finance Journey November 24, 2013 at 8:50 am

I’m a big fan of Capital One’s savings and checking accounts as well.

With the college savings accounts, do those receive any sort of preferential tax treatment, or are they just a normal taxable savings account?

Julie November 24, 2013 at 12:56 pm

Jacob, the college savings accounts at Cap One 360 are just regular savings accounts. We transfer the money from there to 529s from time to time, however.

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