We have 529’s set up.
What I like about them – they are owned by the parent, not the child… Heaven forbid your child turns out to be a loser… but it could happen. And if that happens, the money is still mine, and I can use it for the sibling.
What I don’t like – limited investment options. We have the Nevada/Vanguard one and there is a lack of transparency into what the funds hold – you pick your risk tolerance (conservative to aggressive) and they balance it based on years till it’s needed. Vanguard 529’s also don’t interface with Quicken… (unlike other Vanguard accounts.)
Like you, we don’t plan to fund an ivy league education… We’re targeting UC or CSU schools – and at a poverty lifestyle (no funding for spring break trips, and meals will likely be raman)…
As far as the skin in the game thing… I plan on offering the same deal my parents offered me: Public school fees/books paid for and money towards (but not fully funding) rent/expenses. B average minimum or the kid is cut off. And the degree has to be something that leads to a job. (No offense to liberal arts majors – but I’m not paying for my kids to study art, english lit, history, etc… unless they fully commit to a teaching credential as well. Engineering, nursing, etc are encouraged. It’s amazing what motivation you get if you know you have to show mom and dad the report card in order for the next semesters tuition to be paid.
