Why Saving for My Kids’ College Education Is Not My Priority

by Alexa Mason · 20 comments

College tuition has steadily been increasing over the past several decades. In the last five years alone, it has skyrocketed up 28.9 percent.

While the four-year cost for an in-state university was around $38,000 in 2013, the price tag is projected to be around $300,000 in 18 years — which is just after the time my two kids will be college-aged.

As I take a deeper look into my financial plan, I’m torn. Should I be diligently saving for their education, or should I be investing my extra money into my own retirement account?

There Are No Loans for Retirement

I’m well aware that there are no loans for retirement. (And hopefully you are, too.) But as someone who is very much anti-debt, the fact that my kids might have to take out several hundred thousand dollar’s worth of loans to get a degree is pretty mind numbing.

As a parent, the last thing you want is to send your children out into the world on the wrong foot. But at the same time, there are student loans available for college — while there are no loans available for retirement.

In my opinion, your priority should always be to save enough for your own retirement before stashing away money for your children’s college education.

Alternative Ways to Pay for School

Student loans are not a necessity; there are countless people who have worked their way through college, never taking on debt.

While this is usually the exception, rather than the rule, it can be done. Here’s how:

Scholarships: By getting good grades in high school, students have a better chance of qualifying for college scholarships. There are thousands of scholarships available — and while filling them out can be time-consuming — the rewards are worth it.

Work study programs: Work study programs can help students pay for tuition, room and board, and other college costs. What makes work study programs so great is that they don’t affect financial aid eligibility.

Part-time jobs: While working and going to school might mean slightly lower grades and a longer time to graduate, the pros can far outweigh the cons — especially if the majority of the income is put toward tuition.

Community college: Community colleges can be a cost-effective way for students to get their first two years of schooling in.

In-state college: It costs more than double to go to a private college. According to The College Board, the average cost of in-state tuition in 2013-2014 was $8,893, whereas private college was a whopping $22,203.

To Pay or Not to Pay?

I’d really hate for my kids to graduate with a ton of student debt. At the same time, I want my kids to learn the value of money and hard work — and I believe that having to pay part of their way through school could teach them that. Not to mention, I also want to ensure I have enough saved up for my retirement.

In an ideal world, I’d love to pay the majority of the bill while guiding my kids to pay off the rest. Until then, I’ll take it day-by-day and do the best I can to save for both my retirement and their education.

How do you feel about saving your for kids’ college education? Is it a priority?

Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence.

They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.

Money Saving Tip: An incredibly effective way to save more is to reduce your monthly Internet and TV costs. Click here for the current AT&T DSL and U-VERSE promotion codes and promos and see if you can save more money every month from now on.

{ read the comments below or add one }

  • Clementine Isabella Sophie Florence Cecelia Marie Grace Emily Charlotte Smythe-Worthington says:

    My husband and I make about a million per year and had plenty saved for each kid to attend college and have everything their. Not paying for your kids education may tell your kids you don’t value it, I would happily put their education before my retirement,

    My kids all have triple majors and multiple degrees or just one (PhD), I want to teach my kids to help others so they can volunteer instead of getting jobs and I don’t want them to have sleepless nights. And I want the best universities in the World for them.

    My kids got offered full rides to Ivy’s for academic/music/sports scholarships but we did not take it because it should benefit someone else.


    When I went to college (late 1960s & then in mid 1980s), the financial aid forms always expected the parents to contribute more of their assets than from the students. So encourage your kids to save money in their name, not yours… Nothing says that you can’t make a gift of a few hundred dollars a year to their funds, during their middle & high school years…

  • Alexis Senger says:

    I graduated in 1990. My parents didn’t believe in providing funds for college. I worked and ultimately got a scholarship that paid for tuition and many expenses. However, college costs more now and I would like my daughter to not have to worry about costs like I did. I thought about costs/budgeting all day long. It’s a matter of degree – you want your children to grow professionally during college. Many internships are unpaid – those are often good jobs for a resume. Professional parents (with degrees) want their children to have a good start in life – leaving it up to the kids with loans – I see it all the time. BTW, community college (high school with cigarettes) is not the same as four year.

  • Wendy says:

    I have mixed feelings on this. My parents made it clear to me that they expected me to go to school, and since they couldn’t help, I’d have to pay for it myself. They also -strongly- encourage me to go to a private religious school, not one of the most expensive, but not one of the cheapest, either. In any case I’d’ve had to live away from home as they lived in a very small community with the closest college of any kind over an hour’s drive away.

    I took a year off before college and worked 3 jobs to save up money, got odd bits of scholarships, Pell Grant, loans, worked all through school. Got sick one semester and lost one or two grants/loans and had to basically redo that year, since I couldn’t afford school without them. Learned about roommates who welsh on you… ended up with a masters in a science field and $30,000 in debt. Fell in love and went overseas where he lived.

    After my dad left when I was 9, and my mom remarried, and later died, everything was left to her 2nd husband (as I believe is normal – there wasn’t much, anyway). After 8 years fighting cancer, my dad died broke. Should I then think my parents didn’t do their job right?

    The real problem I see now, 20 some odd years later, is that I became accustomed to working crap jobs, and grabbing the first job I found, because I always desperately needed money for rent and food. And I continued doing that, up to now. And although it’s not exactly a hard habit to break, I haven’t followed any kind of career path that allows a future employer to see me as a valuable employee.

    And now I see my brothers kids being raised completely different. Not only do they live at home and have their school completely paid (although they do work – a little – after school), they even have new cars, with all gas and insurance paid. My parents answer to “Can I have a car?” was always “sure, anytime you can afford it,” with the result I’ve never owned a car in my life. I think my brother wants his kids not to go through the hardships we went through, but I’m not sure if he hasn’t swung too far the other way

    On the other hand, I wasn’t raised to see money as the be all and end all. We travel abroad once or twice a year, we are careful but not extremely careful with our money when at home, own our flat and half of another (his parents legacy), have investment and retirement accounts. I feel blessed, if I may say that, and wouldn’t trade my life for the world. So… parents, if you can’t or won’t pay for your kids college, it’s not the end of life as we (or they) know it. I’d say it really does young people no harm to work through these problems themselves. Give them good advice about careers they might consider, and encourage them to take their lives into their own hands and think carefully about what they want out of life. It’s not all about the money…

  • AS says:

    I teach my 7 year old daughter how to save and spend money with her allowance and her involvement with the Young Americans Bank which has numerous programs. But let’s be honest, you’re not “teaching” your kid how to manage money by not helping them with college (assuming you are a professional/middle class family – if you are poor, granted that’s another matter). Blowing off college plans/expenses is a feel good thing we tell ourselves so we don’t feel bad about ourselves. We all are capable of doing more than one thing at once – e.g., saving for retirement and college. The power of compound growth will help you more than you think – but one has to think about it when you’re young and when the kids are very young. But these two decisions will guide every other decision you make. Every day. If my daughter had to work through school (like I did) or had tremendous debt, I personally would not feel that I had accomplished what I had hoped to as a parent. Her job is to learn and to get into a good university, my job is to let her know that money won’t be the last thing she thinks about as she goes to sleep in college (as it was for me). She can learn about money but managing extras but not decisions than will change the very course of her life.

  • Ellie says: