Saving for College [Part Two: How to Save]

If you’ve decided that you want to create a college fund for your child, there are lots of ways to make that happen. Some of the best things you can do are getting your child and family involved, and looking into tax-sheltered plans.


Keep in mind that tax-deferred accounts may have income dependent contribution limits and tax penalties for withdrawing from them that can change through the years due to politics and changes to the tax code. So, please check with the IRS to make sure that the information you’re basing your decision on is up to date.


Another thing to keep an eye out for as you’re weighing your savings options is the ability to change the beneficiary of the account to various other people in your family, including yourself, if you need or want to do so. It’s also good to make sure that if you have multiple children you set up separate college savings accounts for each child to make sure that you are allowed to save the maximum amount per child per year with no confusion at tax time.


A Coverdell Account

Contribution limits are income dependent but are generally about $2000/year. You can use the money in this account for things beyond college.


529 Plan

some states offer a state income tax rebate for contributing to them, but most don’t.


Texas Tomorrow Fund, etc.

Upromise, etc.

Saving for College [Part One – How Much Should I Save?]

It’s a good idea to start thinking about college and other expenses for your child(ren) when you become a new parent. Sometimes though, with all the stress and extra expenses and things, we just don’t think about it. So, maybe it’s kindergarten, first grade, or all of a sudden you turn around and your kid is a highschool freshman and you haven’t saved anything to help pay for college for him or her.

Don’t panic. 🙂

Keep in mind that you don’t have to save the entire amount needed to pay for school. There are scholarships, student loans, work study programs, and other ways for your child to help pay for their own education. Also, don’t forget about tax credits such as the Lifetime Learning Credit , the Hope Credit, the American Opportunity Tax Credit, and Student Loan Interest Deductions to name a few. Your employer (or your child’s employer) may also provide tuition assistance.

As soon as you start thinking about sending your child(ren) to college, you should start saving. Even if it’s just $25 a month, that’ll add up over time and, as you get used to saving a little, it often feels easier to ramp up your savings. With my first child, I immediately started putting $25 a month into his college fund. As daycare and diaper costs went down and I got a raise at work, I was able to put a little more away for him every month without missing it because I was already used to not having that money to spend.

Most financial planners recommend that you save for about a third of your child’s college costs, and that you prioritize your retirement savings over college savings for your children. The reason they say to save a third of the costs is because you don’t want to over-save in tax-deferred accounts and end up paying penalties if you take money out later to use it for things other than educational costs. Prioritizing retirement savings over college savings is important because there are a lot more sources for college money than there are for retirement. We’ll discuss retirement savings in another post.

To get an idea about how much college will cost for your child, first let’s look at the current cost of the institution (or an institution similar to the one) you’d like him or her to attend. I’m going to use The University of Texas at Austin, since it’s my alma mater and a state school, (and my kid could technically live at home while attending which would save us a lot of money).

If you want to do this math by hand,  we can take the numbers from today and assume about a 7% per year inflation rate. If we estimate that today’s tuition is about $10k/year and that the child we’re saving for is going to college in 10 years, that’s:

  • .07*10000 for year 1 (this year)
  • .07*10700 for year 2 (next year)
  • .07*11449 for year 3, etc.

Keep going until you get the rate of tuition at the time of attendance and for the four years that they’ll potentially be in school. Then you can add the four years (years 11-14) of tuition cost together and come out with your estimated total.

Let’s say that, like me, you don’t want to spend a lot time doing this math. There are also lots of calculators out there that will do the numbers for you. Here’s one:

This calculator shows that in about 10 years assuming a 7% inflation per year, the cost of four years of tuition at UT will go from about $40k to about $87k (and that’s not counting books, computers, or room and board). In our example we have 10 years to save up, so, for the sake of ease, let’s round the total four-year tuition cost up to $90k. That means we’d need to save about $9000 per year for the next 10 years (or $750/month) if we wanted to save up for the whole estimated tuition amount. Depending on your circumstances, that could be a pretty daunting number. Let’s instead estimate a more manageable goal of a third of the full tuition cost or about $30k, that would mean we’d need to save about $3k/year for 10 years, or about $250/month.

Just remember: there’s no rule saying that you have to save money for your child’s college or how much you have to save. That said, starting with saving something, even if it’s not much at first, is better than not saving anything at all. We should also remember to re-evaluate our savings potential and ability as we go along. Saving can be a dynamic process just like our lives.

In my next post, I’ll go over some of the best ways to save for college.

What are the differences between HMOs, PPOs, and EPOs?

Choosing a health insurance plan can feel overwhelming. As someone who’s worked in healthcare, and in human resources, I’ve talked to lots of people about their benefits and helped them make decisions for themselves and their families. I’ve also had to do this for myself every year, sometimes more than once in a year. I’ve had both HMOs and PPOs at different points in my life, but for some folks, it might make sense to choose an EPO.


HMO stands for “Health Maintenance Organization”. With an HMO, you choose a Primary Care Physician or PCP. This person will coordinate all of your medical care. So, imagine you had a series of upper respiratory infections, you would need to go see your PCP and then, if they couldn’t get your symptoms under control they’d likely refer you out to see an allergist or possibly to an Ear Nose and Throat specialist in their localized provider network.

The main pros of an HMO are that they tend to be a little less expensive and the provider knows your medical history so they can use that knowledge to better coordinate your care with anyone you’re referred out to see. If you ever need to get your medical records together, they’ll all be gathered into one place while you have a PCP.

The main cons of an HMO are that you have to work within a smaller, more localized network (which makes it a good choice if you rarely travel as providers/services out of network aren’t covered), and your PCP has to manage your care. This means that you can’t just call a clinic and get a walk-in appointment with whoever is there. In order to utilize your HMO medical benefits, you’ll have to choose a PCP. As with choosing a lawyer, a therapist, or a hair stylist, finding someone who’s the right fit for your needs, wants, and personality can prove to be a difficult, time-consuming process. Also, if your PCP is out of the office, you may have to wait for them to make a decision or for their staff to send paperwork to someone you’re referred to.

The exceptions to having a PCP manage all of one’s care is that women don’t need a PCP to refer them to an in-network OB/GYN, and, if there’s an emergency and you need to go to the ER, you also don’t need a referral. Just make sure the ER you choose is in network if at all possible because procedures out of network generally aren’t covered.


PPO stands for “Preferred Provider Organization”. PPOs are the most common type of health insurance plan you’ll see these days. With a PPO, you have access to an expanded network and you don’t need to choose a primary care physician.

The main pros of a PPO plan are the ability to make an appointment with anyone in or out network without a referral. If you want to see a dermatologist, you can look up anyone, check to see if they take your insurance, and then, make an appointment with them. Of course, staying in network has its benefits: lower copays and a higher rate of coverage, but you have the choice of going out of network.

The main cons of a PPO are that they tend to be a little more expensive, and since there’s not one person managing your care or compiling your medical history you may have issues coordinating treatment plans between multiple offices.


EPO stands for “Exclusive Provider Organization”. An EPO limits your network to an even smaller and more localized group than an HMO, but, like a PPO, allows you the freedom to see anyone within that network without a referral. I rarely see EPOs as an employer offering.

If you choose an EPO, you need to make sure that whatever hospital or doctors you see are in your network or your services will not be covered and you’ll end up paying all of those costs. In the event of an emergency, your EPO may cover some of your costs if you are out of network, but you’ll need to check the fine print on the plan you choose.

The main pros of an EPO are that they tend to be less expensive, and, so long as you’re seeing a provider in your network, you don’t need a referral.

The main cons of an EPO are that the network tends to be small and if you are traveling outside of your network and get sick, your services will not be covered at all unless it’s an emergency.

How to decide?

If your employer gives you each of these types of plans to choose from, barring all other criteria (e.g. maximum out of pocket, copays, etc.), these are the questions I generally use to help determine which type of plan to go with.

  • Do you want one provider managing your care? Yes – HMO, No – PPO or EPO
  • Do you have any condition that needs to be managed closely and may require consultation among several practitioners? Yes – HMO, No – PPO, EPO
  • Do you tend to see lots of specialists and/or want more choice in who they are (e.g. dermatologists, etc.)? Yes – PPO, No – HMO, EPO
  • Do you (or anyone who would be covered by this plan) travel a lot? Yes – PPO, No – HMO or EPO
  • Do you want or need less expensive premiums? Yes – HMO, EPO, No – PPO
  • Do you see a doctor (that you want to continue to see) who is in network for one or more of these types of plans and not another?


Hi there, I’m Hollyann. 🙂

I figure, it’s best to simply start and to start simply.

I’m ENFJ/ ENFP. I like to help people and I get bored if I do the same things over and over again. I’ve worked in food service, theater, book stores, health care (both in medical records before and after they went electronic, and in patient services), education administration, and I’ve worked in high tech, both in startups and in a global giant.

I have 15+ years of experience helping people be more efficient and do more with the time they have and I’ve basically spent my whole life figuring out logistics and solving problems.

I decided to start consulting because it’s a great way for me to meet and help new people, accept new challenges, and to grow and learn and share my knowledge.

I’m looking forward to posting the answers to questions I get, and to talking about problems I’ve solved, and my thoughts on technology, the future, and other things, but mostly, I’m looking forward to hearing from you and maybe even working with some of you.

Welcome to the journey, I’m glad you’re here.