Best And Worst College 529 Plans From Morningstar

Morningstar has released their picks for the top five and worst five 529 college-savings plans. To make their choices, Morningstar “focused on diversification, fees, flexibility, and the underlying funds.”Here are the top five:

- Illinois Bright Start College Savings Program
- Maryland College Investment Plan
- Virginia Education Savings Trust
-Virginia CollegeAmerica 529 Savings Plan (broker sold)
- Colorado Scholars Choice Savings Program (broker sold)

The worst five:

- Ohio Putnam CollegeAdvantage (broker sold)
- Mississippi Affordable College Savings Program
- Mississippi Affordable College Savings Advisor Program (broker sold)
- New York 529 College Savings Program
- Nebraska AIM College Savings Plan (broker sold)

I’m a little concerned that New York’s plan is considered one of the worst. Not only do I have two funds under the plan (one for each child) I also said recently that it’s a good plan. The main criticism from Morningstar is that the plan doesn’t have any exposure to international funds so it’s been missing out on international gains and it’s not hedged against US economy downturns. Other wise Morningstar says it’s moderately priced and they like that it’s made up of Vanguard index funds.

Many people, like myself, contribute to their own state’s plans since it’s likely they get a tax break. But depending on the plan and state you may be better off contributing to another state’s plan.

The Wall Street Journal suggests the following when considering a 529 plan:

“• When shopping for a 529 plan, you should consider costs, investment options and asset-allocation strategies.

Weigh any tax advantages of investing in an in-state plan against the plan’s total costs.

Look for annual asset-based fees of less than 1% for direct-sold plans and less than about 1.3% for broker-sold plans.

Compare state plans at www.savingforcollege.com, www.collegesavings.org or www.morningstar.com.”Hopefully Morningstar’s review will prompt the New York 529 plan to consider some international exposure otherwise I may have to look into some of the better plans.

Do you contribute to a 529 college-savings plan?

Emotions Got The Best Of Us At The Picture People – Review

Baby pictures at The Picture People

So this past weekend my wife and I took the kids to get their pictures taken at The Picture People at the mall. We had a coupon for a free 8×10 portrait and since we hadn’t had pictures taken of our children together we thought we’d go (the little one is an infant).  We figured we’d go in, get our picture and get out.  Far from it!

Baby pictures at The Picture PeopleThey have some marketing plan set up there! We got there and checked in.  When it was our turn we were brought to a curtained off area to take pictures.  The photographer is a young guy with a digital camera.  He took all sorts of pics with each child separately as well as together.  When the picture taking was over we told to wait a bit and we would be helped.

Here is where they get us:

  • They show you about 20 pictures, all which make you say “awwwww.”  Now we want all of the pictures.
  • The sales person says “wouldn’t this be nice” and takes out a large, vertical, black and white portrait already framed.   It looks amazing until we’re told it costs about $150. He also produces a large horizontal frame with three photos.
  • When we seem like we’re not so sure he tells us there’s a way he can get us the three pic frame as well as some others in a great package that will save money. Sounds interesting. Oh, the package costs $249!!
  • When we’ve finally decided what we want (much more than what we planned) and we’re ready to pay we’re told about a membership club we can join that will make one of our pics cheaper and entitle us to some free pics throughout the year.
  • They also ask for your email address so you can view your photos online. They encourage you to send the site to friends and family so they can see if there’s pictures they want to buy (you can put a picture on anything from a mug to a mouse pad or just order copies).

Suffice it to say we spent way more than we intended to. The pictures do look great (including the three picture frame we got) and they have everything done for you within an hour.

Pros and Cons About The Picture People

Pros

  • Convenience – We made an appointment and went to the mall. We didn’t have to schedule a photographer to come to the house.
  • Ease of Service - The people were friendly and you walk out with your photos within an hour.
  • Price – Although we spent more than we wanted to it would have cost more to hire a photographer.
  • Quality – The pictures really do look great!

Cons

  • Atmosphere – It’s a bit of a mad house there with all of the families coming and going, many with small children.
  • Price – Yes it’s relatively inexpensive but the photos and packages still come out to a hefty amount (at least to our liking).
  • Emotional Factor – It’s really tough to say no to all these great pictures of your children. You see them and want them all.   I jokingly told the sales person that it would be on his conscience if we couldn’t afford to put our kids through college.

Overall we’re happy with the product and we will be going back to get our free pictures (yeah we signed up for the membership). Since we now have some nice photos we won’t be needed large packages and we intend to only go for our promotional photo.

The big lesson here is that spending is emotional and we have to be careful not to let our emotions get the better of our budget!

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