Alexa wrote a great article last week, on Why Saving for My Kids’ College Education Is Not My Priority, and I thought she made excellent points. It’s my belief that as a whole, parents are bringing up their children to be self-entitled and have everything come easy to them.
I have many friends whose parents paid an outrageous amount of money for a private four-year university, only to have those same kids needing their parents’ financial help after they graduate, then buy houses and have children.
Even though I don’t want to just hand my child $100,000 and tell them to get a good education, I do want to make saving for their future college fund a priority. Here’s why I plan on giving my children $20,000 to put towards their college education.
Working My Way Through College
My parents never saved any money for my college. I don’t think for one second I was entitled to money by any means. Everything I wanted in life, I had to work for, and that was the same for my education too. I applied for several scholarships, jobs, and work-study jobs. Scholarships are very competitive, and when you have an average family income, or an average set of skills and intelligence, many donors don’t want to give you money. I was, however, blessed to win $1,500 in scholarship money from three different scholarship programs.
I also went to two community colleges my first year and did two years of work in one. This allowed me to graduate in three years with my BA instead of four, which helped saved a few thousand dollars.
I then went to a state college. Even though the tuition was relatively cheap ($4,000 a semester, not including all the other fees, like books and parking passes), I had a difficult time paying for it. I worked 30 hours at a local Starbucks, from 4am-8am most mornings, and then drove an hour to school (the closest university), and there I would stay until 9 pm in order to fit in the most classes I could. I repeated this schedule 4-5 days a week.
Even though I tried to be frugal by carpooling and making my free Starbucks drinks into meals, my $400 bi-weekly paycheck didn’t go that far. Because of this I wished my parents had saved just a little bit of money for me. The fight to finish college definitely taught me well, and enabled me to become more successful in my finances as an adult, but it was still hard and stressful.
At one point I was offered a $40,000 student loan, which was way more than I needed. And even though my mother actually strongly encouraged me to take it, thankfully, I didn’t. Because of this I didn’t have any student debt when I graduated.
If my parents had simply put away $50 a month every month from the time I was born until my 18th birthday, they would have easily saved around $10,800 (not including interest payments). That would have been such a blessing and made my life so much less stressful during my college years.
Giving My Kids $20k For Education
As parents, we all have something on our side that our kids don’t have. We have the power of time. Saving a little bit of money into an account or in bonds now, will easily grow into more money just because we have time on our side.
My savings goal for my children is to save $20,000 for each of them by the time they’re ready to go to college. If they choose to go to community college and state school, that should pay for all of it. If they choose to go to trade school, that should pay for all of it.
If they choose to get married and be stay-at-home moms (since I only have girls so far), that will be a great starting point for their new lives. And finally, if they choose to go to a private college, the funds will at least give them a head start, but they will have to pay for the rest. The $20,000 will be my gift to them after hopefully many years of financial education and helping them realize their passion and calling in life.
Of course, I’m a big follower of Dave Ramsey’s baby steps, so saving for your children’s college fund shouldn’t be the number one priority if you’re in debt. Instead, it should be a priority among many. Paying of debt, mortgage, and having a fully funded retirement definitely need to be given higher priority.
How hard is it to save an extra $50-100 a month for your kids? Maybe it means not spending too much money on birthday parties, presents or extra activities.
All of those are nice, but a college savings will be a much bigger blessing to them. We all want our children to be wise with their finances, and to start off on the right foot when they enter into adulthood. One of the ways to ensure this happens is through saving for their college fund as a part of equipping them for life’s journey.
Do you agree with my strategy? Are you saving for your children’s college fund? Why or why not?
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