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May 2008
Author Tracey Lamphere and daughter Violet

I'll sit in traffic, she'll go to college

Small sacrifices lead to big rewards.

by Tracey Lamphere

It’s hard for me to imagine Violet, my almost two-year-old, will head off to college in 2023. I have a huge task ahead of me: Saving enough money to finance her educational dreams.

Four years at the University of North Texas, my alma mater, will cost an estimated $114,800. If she wants to go to Harvard, that will cost $429,000. I’m not a saver, and our household income is squarely middle-class. But there is help.

In November 2007, the Texas Comptroller of Public Accounts unveiled a new and improved Texas 529 College Savings Plan (TCSP) managed by OFI Private Investments Inc., a subsidiary of Open Inc.


6% ROI$28,600
8% ROI$34,600
10% ROI$42,200

5 years old

6% ROI$18,700
8% ROI$21,200
10% ROI$24,100

12 years old

6% ROI$8,900
8% ROI $9,300
10% ROI$9,700


Skipping that
morning cappuccino

Skipping that $3 cup of joe 5 days a week means big savings. In 5 years you would save $8,900 at a 6% rate of return on your investment (ROI).

Start saving now through completion of your child’s four years of college and you would build a substantial college nest egg.

The 529 plans have been around since the U.S. Congress created them in 1996 and will eventually be as widely used as the 401k, says Bill Raynor, OppenheimerFunds vice president for 529 plans national sales. Raynor says paying for college comes down to one question for many families: Pay now or pay later?

“Do you want to earn interest or pay interest?” asks Raynor, whose daughters, ages 5 and 6, each have a fund. Raynor began with saving $50 a month, and as his income grew, so did his fund contributions.

I opened a Texas College Savings Plan account in December with $50, though it can be done with as little as $25. The Oppenheimer calculator indicated that making a monthly payment of $150 for the next 20 years (16 plus the four that Violet will be in school) at 6 percent return on investment (ROI) could produce $57,000. At an 8 percent return, I would have nearly $70,000. While it’s only a portion of her college costs, I would rather have some than none.

For now I’ll invest $50 each month. I’ll skip the toll roads, brown bag my lunch and brew my coffee at home. As my income changes – and Violet becomes a potty-trained preschooler – my child care costs can transfer over to her college fund. By December, I want to contribute at least $250 each month. At 6 percent ROI that’s $100,000.

If you don’t have 16 years to plan, say your child is 13, you still have time.

Raynor says any action is better than no action. You have nine years (five plus college) and your college costs won’t be nearly as high as mine. In four years, UNT will cost about $67,000, but as Oppenheimer points out, saving $590 a month to reach that amount may not be feasible. But it’s OK. This is not an all or nothing deal.

It’s time to prioritize and sacrifice. If you scraped together $350 each month for the next nine years, your 13-year-old, who has nothing saved now, would have more than $51,000 at 8 percent ROI. It’s a start. FN

For information on the Texas College Savings Plan visit or the LoneStar Plan at

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