Why I Save For My Children’s College Education

Why I Save For My Children's College Education - picture of glass jar with coins inside and label of college on side

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Yesterday, I shared on Get Rich Slowly about how Greg and I plan to pay for the majority of our children’s college education.  In case you don’t want to read the whole post, I’ll share the gist of here:

Basically, we’re saving small amounts monthly and lumping all of their birthday and Christmas money into their respective 529’s.  And sometimes we put a lump sum in at the end of the year to decrease our tax liability.  Beyond that, our plan is to have our two rental properties paid off in 12 years and use the monthly cash flow from those properties to finance their schooling.

Why I Plan to Pay For My Children’s College Education

To be honest, we don’t anticipate being able to pay for all of their schooling because, as we all know, plenty of things could happen between now and then.  On the other hand, we do plan to pay for at least half of their college education and hopefully more.  Here’s why:

We Brought Them Into This World

I don’t necessarily think that everyone who has kids should be expected to pay for their college education, but I do feel a personal obligation to do so.  Why?  Because I brought them into this world.  I made a conscious decision to procreate, and I only did so because I believed I could set them up for success.  Of course I can’t guarantee them that, but I don’t want to be the reason for their struggles either.

College Is Expensive

A college education is becoming a necessity in today’s modern workplace.  In fact, many experts say that an associate or bachelor’s degree is the “new high school diploma.”  I hope to steer my children toward a state school or community college, but those options still won’t be free.  Student loan debt is at an all-time high in this country- a cumulative $1 trillion dollars and growing each day.  I want to spare my children from at least some of that burden.

Because We Can

We would feel like enormous douche-bags if we didn’t have some sort of plan to help our children pay for part of their higher education.  Why?  Because we have plenty of money.  In fact, we make enough money that we will probably hurt our children’s chances of getting very much financial aid or help. And that’s another reason why it makes perfect sense for us to save for them.  Why should our kids suffer because their parents are relatively high earners?

Why Is This Controversial?

It seems like people turn into raging lunatics whenever this topic comes up, though I’m thankful that the commenters at Get Rich Slowly did not.  On one hand, you’ve got the parents who are saving or at least have some sort of plan in place.  But on the other, you have parents who refuse to save for various reasons or simply make excuses to avoid feeling responsible.  Some of the most popular excuses I have heard in the past:

“I worked my way through school.  My kids can do it too.”

“I took out student loans and I did fine.”

“They probably won’t go to college anyway.”

“I don’t want my kids to take college for granted.”

I also know people who don’t save for their kid’s college  because they “want them to struggle like they did.”

That I just cannot understand.

Then there are parents who truly cannot afford to save for college, and I feel for them.  When faced with a choice between paying for basic necessities or saving for college, it makes total sense why someone would forgo college savings and focus on getting through today.  The good news is, students from low-income families typically have access to more financial aid which can help them get through school at a price they can afford.

I think that’s great, but my children can’t count on getting any help.  That’s why I feel strongly that I should help them myself.

Ignore the Naysayers and Start Saving

Despite what anyone says, saving for your child’s education will not necessarily make them spoiled or entitled, nor will it make them do something stupid like spend $100,000 on a Master’s Degree in Liberal Arts from the University of Phoenix.  You also don’t have to compromise your other savings goals (like retirement) to start socking away small amounts of money for your children.

It does not have to be one or the other. 

You can do both- just start early and make a commitment to save on a weekly or monthly basis.

The money can add up quickly if you let it – but you have to start.

Save More for College! With CollegeBacker, you can start investing in your child’s college education tax-free with just a few dollars. There are no required fees and it takes just 5 minutes to get started. Learn More Here.

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  1. “We brought them into this world” .. To me, that is the most important thing. It was a choice , and the responsibility should fall on the parents. My view is probably a little different in that l was born in a place with no financial aid, etc,.etc..that the U.S offers. I have known people in the last who have kids willy nilly, knowing that the burden is shared by the taxpayers..really pisses me off . Can’t afford them, don’t have them..they are not toys or trophies! Fantastic that you are planning ahead…continued success!

    1. I think people of all income levels should have kids BUT I think people who have the means to save should at least try!

  2. We plan to begin saving for our daughter’s college before the end of the year (she’s only two months old right now). With college costs as expensive as they are, it only makes sense to me that parents should help their children out if they are able.

  3. I really hate the attitude of “I struggled, so can they”. Um, no. Not how I see it. I struggled so they don’t have to!

    We have talked about putting all their bit g’day and Christmas money into a college savings plan and just haven’t. Terrible. That is something that needs to get bumped to the top of my to do list!

    I’m glad you noted the tax benefit, though. That is something I hadn’t considered and I need to look at more closely. It might be something that helps me stay home easier (not sure, have to look at this more). We’ve also owed (owed!) on our taxes the last two years since moving to this more expensive state. So since we need to do this anyway and it could help us not owe on our taxes, that’s extra motivation.

    1. Check to see what your state has to offer! Our state (Indiana) offers a 20 percent tax credit on the first $5,000 we contribute each year. And that’s a credit- not a deduction!

      1. Wow – 20% tax credit is a great deal!! In Michigan, our 529 plan contributions are tax deductible up to $5,000, but our state income tax is only 4.25% and it’s a deduction – not a credit – for us. Nevertheless, if I contribute $5,000/year for each of the next 16 years, that’s $80,000 in the college fund, $3,400 in money back from taxes versus if I didn’t have the deduction, and 16 years of tax-free growth. The funds in our plan are low fee and have performed well in recent years. They also offer a prepaid tuition option, which I think gives you an even bigger tax break, but that has more restrictions (like a deadline for when you must use it by and what you can use it for). It’s definitely worth folks researching the situation in their respective state. I have heard folks say that they don’t want to save in a 529 because they aren’t sure if their kids will go to school in-state or if they will still live in the same state 18 years from now; this shouldn’t matter as 529 savings can be used at any school (public or private, community college or trade school) and in any state, or passed down to future generations if for some reason your child does not elect to use it. It’s an awesome opportunity.

  4. This excuse is my favorite: “They probably won’t go to college anyway.” That’s a nice, positive thing to say about your children.

    I will absolutely help pay for college for my kids and will start saving the second I have them. I had some help, but still struggled and had to work and still have a ton of student loan debt. I know how hard it is – I want better for my children. Isn’t that the point?

  5. It is weird that it’s controversial. I save for each one of my children, but I bet they will all end up with scholarships. Which means free money for them. I don’t think we are obligated to save for our children’s college, but we definitely have that option and I think it’s a great idea.

  6. We don’t have kids, so I’m not really sure what we would do. Studies have shown students that are 100% supported by their parents in college don’t do as well as those that have “skin in the game”. And that makes sense to us… Mr PoP was 100% supported by his folks, getting a job only for coffee/beer money, whereas I was 100% responsible for my entire education costs – and I got scholarships, jobs, internships, loans to pay for it. Of the two of us, I was definitely the one that was more serious about getting all I could out of my education.
    Maybe there’s a happy medium in the middle there? Luckily we don’t have to find it anytime soon.

    1. I do think that there needs to be some shared responsibility for expenses. I’ve seen many youth fritter away making the most of their education by partying all the way through their parent funded college days.

    2. I definitely think there is a happy medium in there. It does not have to be one way or the other. I plan to help my kids as much as we can, but it is ONLY if they are helping themselves. Asking your kids to have skin in the game and refusing to help your kids at all are two entirely different things.

      1. I agree with Mrs. PoP. My husband’s parents funded his tuition and he worked part time to fund his living expenses. He lived at home. My parents helped with what they could. $300-$400 a month stipend for 3 years. I got scholarships to pay for the rest of my college. I received a 100% tuition scholarship for college, and then grouped together other scholarships to pay for room/board. I graduated with honors, while my husband did “just fine.” I, also, see parents sending kids to out of state colleges here to give them the “experience.”

        1. Both of you might feel differently if you had children yourselves. Bringing a child into this world is a scary thing- you look into their eyes and see what’s going on in the world and truly feel for them. It’s easy to say what you would/wouldn’t do when you don’t have kids. I know my ideas on parenting have changed immeasurably since I became a mother. I feel more responsible for them than I ever could have imagined.

        2. I completely agree with this sentiment. MY parents struggled to send me to a top 5 liberal arts college, but they did it and I worked my way through school to pay for my “fun money.” My husband on the other hand had his parents pay for his degree and he didn’t even finish. We accumulated $8500 in debt last year so he can finish his degree. It infuriates me to no end how he could have squandered so much and I place the blame equally on him and his parents. For this reason, I have decided to set aside a “set amount” for our future children so that it won’t all be paid for, but we’ll help to an extent.

    3. I don’t think studies have shown that, or at least not good ones. The correlation will certainly go the other direction and studies have shown that working more than 20 hrs per week is correlated with dropping out. Working 10 hrs or less is better than 0 in correlation, but that says nothing about parental contribution. My parents paid but I still had work study for incidentals.

        1. I can look at the full article when I get to work, but in the forbes piece, the author says it’s not a problem paying for art supplies but for spring break trips.

          1. Ok, so even not getting into how they get to their conclusions, their conclusions are very nuanced.
            1. Parental financial investments increase college attendance. So if you want your kids to go to college, you shouldn’t make them pay for the whole thing.
            2. Parental aid decreases student GPA (controlling for explanatory variables and accounting for alternative funding). So paying for everything means kids get lower GPAs (maybe because they can afford to do fun things other than study on campus).
            3. Parental aid increases the odds of graduating (controlling for explanatory variables and accounting for alternative funding). So not paying for your kids means they’re more likely to drop out.

            So this fits with the study that finds that working 10 hours or less per week helps college outcomes and working 20 hours or more per week hurts college outcomes.

            In other words, putting those together, it’s likely that if you pay for kids’ entire tuition and books and some of their living expenses, and they have to work to get spending money and/or some of their living expenses, you’ll be optimizing.

            As for a more detailed analysis of the paper, that will have to wait for a future Grumpies post. (Probably next summer given how much work we have to do.) It’s an interesting paper in a top journal, but that Forbes article makes it seem less nuanced than it actually is. The nuance is also probably why it hasn’t been all over the internet.

    4. A friend of mine was presented this deal by his parents. You take out the student loans, and we’ll pay them off for any class you get an “A” or “B” in. If you want to putz around and fail your classes, then you are stuck footing the bill for it. If you want to put in the effort, we’ll alleviate that burden. It seemed like a fair deal to me, and it only took him one semester to learn. While I HATE the idea of student loans, it also gave his parents a great avenue for instilling personal responsibility and helping him understand debt and credit, while helping him to help himself.

  7. Diane@HappyBeingFit says:

    I have good kids. My daughter is in college now and I do feel the need to help them through college. I figure I either help them now or help them later when they are broke and in debt from student loans! Helping could mean many things like letting them live at home or helping out with other expenses and letting them save their money from work for college. My daughter does have to pay for some of her college expenses and I think it gives them a sense of ownership. I always have a rule that if you do not pass a class then you have to pay to take it over. Overall I think if we have the means then we should help them. I would never want my kids to struggle like I did just to prove a point, that just seems wrong. Talk with your kids when they get older and adjust the college plan as needed. It doesn’t have to be all or nothing.

    1. I would love to talk my kids into living at home for at least the first few years. We have several schools nearby and I think they could make it work. If they lived at home, that just means I could help them with college a little more than we planned.

  8. College is really expensive. I wish I had educational plans prepared so that I would have needed to work extra. Just to focus on study and get in the honor list. When I have kids, this is one important thing I would definitely prepare for them.

  9. We wont’ be paying for our daughter’s education (although I don’t disagree with your reasons for doing so) because I want her to develop a good work ethics. We are, however, saving as a gift to give to her at some (undetermined) point in her life. Basically our feeling is that if she can show us she is responsible, then we will give her the money. If not, then we’ll see!

    1. She could always use that gift for college or to repay part of her student loans!

  10. I feel the same way and hope to help our daughter with college. If she chooses an expensive one or decides to party through school, then she will have to figure out how to fund it. Hopefully we can make smart choices to get the most value out of an education.

    Being a bit older, I have friends who have college age kids and they are going into serious debt to support them and pay for school. Most have little or no retirement. If you’re gonna pay for your kids, start saving when they are born or as soon as possible. I would not go into credit card debt to send my kid to school.

    1. I agree! We didn’t want to wait until our kids were older to figure it out so we started saving small amounts early.

    1. You guys save A LOT more than me. You are going to be the most prepared person I know.

      1. Good grief, I just looked at our son’s 529 account. The stock market run-up has done a (good) number on it— $69,874.56. $500/mo for seven years plus stock market earnings really adds up over time. I don’t think it’s time to stop contributing yet, and we do have time between our two kids to adjust based on what kind of aid the eldest gets or doesn’t get.

        1. Good lord! That is amazing! My kids don’t have anything close to that! That is awesome!

          1. If my quick calculations are correct, ~25K of that is earnings(!) Compound interest from stocks over a long period of time is AMAZING. It’s just in one of the Vanguard target date funds from the Utah system, so we’re really just matching the market.

  11. I’m with you Holly. We will save for our 3 children’s college education. As a parent I feel it’s part of my responsibility to do so. I also think it part of my responsibility to educated them on personal finance, help prepare them better then I was for their financial lives.

    1. Yes, exactly. I want my kids to understand the basics- how bills are paid, what things cost, and what their financial decisions really mean.

  12. I’ve been all across the board on this one. I ended up paying 100% of my college costs, and it was a huge struggle. When my younger sister went off to school, I wanted her not to struggle so much, so I made the very bad mistake of cosigning on a lot of loans for her. She never ended up finishing a semester in college, and since she made very little money, the lenders came after me instead of her. She felt no responsibility for the loans, and it ruined me financially.

    That situation left me with the feeling that maybe it was better if the student had some “skin in the game”, but also left a very negative feeling about student loans. When the boyfriend’s youngest went off to college, the boyfriend paid 100% for his Freshman year. But by Sophomore year his son wanted his independence from Dad, and took out massive student loans instead. I was completely against this; He is taking out the max in private student loans, meaning with his Staffords, he’ll probably graduate with close to $100,000 in debt. I would have much rather we struggled for 4 years for him to graduate with very little debt, than him borrowing that kind of money. Also, Dad “signed something”, but has no idea whether he’s a cosigner, or if his son took out Parent Plus loans in his name. So, either way, if something happens, we’re on the hook for all of it.

    We don’t plan on having children, so I’ll likely never have to plan on college costs for my own children. At the very least, I think it’s important that parents talk to their children openly, and let them know what is expected. My parents left me with the understanding that they would be paying for college, so I wasn’t worried about the cost when I started. I was shocked going into my Sophomore year to find out that not only did I have to pay going forward, but that I had to come up with the money for my Freshman year as well. I would have made very different choices had I known how much it would cost me. My parent’s income didn’t allow for any financial aid, but luckily I had good enough grades to score some scholarships, which helped tremendously.

    1. Yikes! Sorry you had to deal with that! I would be livid at my sister! Are you?

      1. I was incredibly hurt. I had to make the tough decision to value our relationship above what happened. It was a harsh lesson, but a big turning point in my financial life. It’ll still take years before I’m fully recovered, but in the end I think I’ll be better for it. But I have a hard time trusting anyone now; I’ve seen how much the people who are supposed to love you the most can hurt you. I think of everything in a “worst case scenario” kind of way, and am always thinking of ways to try and protect myself, just in case.

  13. Hey Holly,

    Great points. I feel that I should do something to help out my kids (when I have them), but I just don’t know how far to go. I kind of want to do a little bit of savings maybe twice a year at their birthday and Christmas, but I know it would not be enough. But I am hoping I can just straight out pay for the first two years at a community college and then they could use that fund for the university level. It is better than nothing, but we shall see what the future holds.

    1. I would love for my kids to do two years at community college then transfer. We’ll see!

  14. “…because they “want them to struggle like they did.”” There has to be a healthy balance with this one. Kids are going to go through struggles just because that is life. That’s good imo…helps them grow up emotionally as they learn to handle difficulty. And, as parents, we can teach and support them as they go through these challenges. Intentionally creating a struggle (in this case a financial one) is another matter entirely. I can’t see why that makes sense to people.

    1. Me neither. I believe in helping my children with college, but that doesn’t mean I can shelter them from all of life’s struggles. And I certainly don’t want to be the reason their lives are harder than they need to be.

  15. I agree with you on the “I made a conscious decision to procreate, and I only did so because I believed I could set them up for success.” I think that pretty much sums up how I feel about our future kids. Starting to save for college early on makes sense to me!

    1. It really does help. We started when our kids were babies and it really does help. Their funds are still small but growing!

  16. I think everybody should do what they think is best for their children and if this is what you think you need to do, then you do you girl.

    But I don’t think it is your responsibility because you brought them into this world. I think is our responsibility to provide all the necessities for them to safe, healthy, and have the opportunity to be successful, but paying for their education is not a necessity, in my opinion.

    You can argue that having a college education now or in the future is almost a necessity, but there will be others that argue against it. I’m probably going to help my kids with college, but I’m not going to just pay for it all. If they want a college education, they’re going to have to work hard for it. I don’t want them to feel entitled to anything.

    That being said, I’m also going to start a 529 plan to help them out if they need it.

    1. I hope to pay for it all, but plan to pay for at least half. Our kids are only 3 and 5, so I can’t make any kind of firm commitments yet. I personally don’t feel like saving for a child’s college leads to entitlement- there are plenty of ways to make sure your children aren’t spoiled without neglecting to put away extra money for their education. I tell my kids “no” 99% of the time and I am not going to tell them I am paying for most of their college ahead of time.

  17. I think what you are doing for your kids is wonderful. They will really appreciate it someday. We plan to do as much as possible for our own children someday as well. I don’t know if we’ll be able to cover the whole bill, but we are going to help them as much as we reasonably can.

  18. I find that most people tend to want to pass on the situation they had. Nearly everyone I talk to who isn’t saving for their kids had to pay their own way through school. And those with nice tidy 529 plans had their college paid for by their parents. I can understand why. Those who paid their own way through school are proud of the work they put into doing so. They view it as an accomplishment, not necessarily a burden. Those who had their education paid for know how nice that situation was, how nice it was to just be a student and not have to worry about paying the rent and tuition. They want to provide that for their own kids.

    I personally like what my Father-in-law did with my wife. She was required to take out school loans to pay for the bulk of her education. But as long as she got her diploma he would take care of paying those loans off. That gives the financial incentive to do well in school, but doesn’t burden your child with tens (hundreds) of thousands in debt as they’re starting to build their life after graduation. And it’s also about the cheapest financing you’ll ever see…

    1. I don’t mind that strategy at all. It makes it so there are consequences if she had chosen to drop out, but benefits if she graduated.

  19. For parents who say they worked their way through college and took loans…the cost of education is very different nowadays. And for parents who want to instill work ethic in their child…I’m sorry but you have 18 years to do that. If you raise your kids properly and teach them to be financially literate…I’d hope they don’t feel entitled to it and fritter your money away paying for their tuition. I’m saving for college, but it probably won’t cover the entire cost of tuition, depending on what college it is.

    1. That’s basically how I feel. I probably won’t be able to pay for all of it since we have two kids, but that doesn’t mean we cant pay for some of it!

    2. I think there is something to what you said about how you raise your children. There is a lot of evidence (anecdotal and otherwise) that says kids tend to put less effort into their efforts when Mom and Dad are footing the bill. But maybe that’s more an effect of how they were raised (i.e. to feel entitled), than an effect of paying for their education? I’ve known plenty of people who did well even with Mom and Dad paying. And plenty of people who did poorly, or gave up, even if they are paying themselves. I definitely think it is possible to raise a child with a good work ethic, who does well even with Mom and Dad’s help.

      1. Yes, exactly. Like I said in a comment above, there are plenty of ways to teach kids responsibility without neglecting to save anything for their education. We all do things differently, but I am starting young with mine. My 5-year-old has to pick up toys, practice letters, and make her bed every day. As she gets older, she will have more responsibility. She hears no the vast majority of the time and rarely ever gets anything new (although she does get to go on a lot of nice trips). Paying for your kid’s college will not necessarily make them spoiled-that’s silly. Besides, you don’t even have to tell them until after the fact. I don’t plan to announce to my kids that we plan to pay for most of it. Why would I?

  20. It is your money and therefore solely your choice on how you want to spend it. I didn’t have much financial support as my mom was not well off but she did assist me whenever she could and I picked up the slack by working through school in order to keep the student loans at a minimum even though I was eligible for a decent amount. Fast forward to my step-son, we fully intend to help with his educational costs as long as he is fairly sure of what he wants to do. So we need to help him as time goes on to see where his interests really lie and encourage him to evaluate his choices before choosing a major. We’re not going to pay for a kid who is still in college 7 years after he started I can tell you that!

  21. First of all, the debate of if I will even have kids is a whole different discussion. But if I did have these hypothetical kids I would save at least some for their college expenses. I would ideally want to pay for it all, but with the rising cost of college these days that seems like a harder task. My tuition doubled within the time I was in school… I don’t understand how that happens in 4 years but that is also a different discussion.

    My parents paid for my college expenses, they wanted me to get out of school and start at zero, not in some giant hole. They also helped me by letting me move back home rent free until I got a job and eventually found my own place. I would want to do the exact same for my kids if I had them. Now my parents did not pay for my brother’s law school loans. Their idea was that undergrad was on them, but specialty schools were purely up to us to cover.

    On the other hand, I don’t think my parents would have covered my college education if I brought home crappy grades or took 8 years to graduate like my cousin. I have some friends that kept going to school so they didn’t have to start paying back loans, I wouldn’t do that for my kid if they just didn’t want to “get a job”.

    1. Yeah, I definitely won’t bankroll my daughters if they choose to spend 8 years to get a bachelor’s degree. Ha!

  22. I, too, am a firm believer that you can do both, although I do believe retirement savings come first because there is no loan option for retirement. It’s interesting because there are parents who say they don’t have money to help pay for the children’s college eduction but they spend a lot of money on “wants”, which is their choice, but I would also argue that they could free up money to save for their children’s college education by cutting back too. We are definitely saving the for girls’ college education but we expect them to first apply for as many scholarships as possible to help offset the costs. And as much as I love my daughters, I’m also not going to pay for 4 years of party-time either. They can and should have fun (it is college after all!) but I expect them to do well too. Sadly, I see too many parents go into debt to pay for a 4-5 year party for their kids.

  23. How your children approach school (not just college) begins in their early years. If you raise spoiled, entitled children, of course they will not appreciate your paying for their college education. And they probably won’t knock themselves out in the studying category. We have 3 kids and we paid for their college tuition/fees/books/room&board. They were on the hook for their personal expenses (phone, clothes, entertainment etc.). It certainly helped that they went to community college first and then transferred. All 3 graduated in 4 years w/o debt. DD1 has her doctorate in physical therapy; DD2 is a medical doctor; DS works in insurance while he pursues his real passion: theater.

    From their first day in kindergarten, we stressed that school was their job; just like mommy and daddy had jobs. They bought into that. Also, they did not have every toy/gadget under the sun. No cell phones until they started college–same for laptops. Only 1 t.v. in the house; camping vacations, chores to do, etc.. We spent a lot of time at the library. They did participate in sports but we limited their outside activities like that to one per season. We did buy an old clunker for them to use to commute to the comm.college. Fortunately, it died after DS finished his two years there.

    Parents: Wherever your child goes to college, READ the college catalog. It is the bible for college. Too many students/parents don’t even look at the catalog. It’s a good idea to see what’s required for the major and compare with the fall/spring class schedules. Some courses are sequenced and only offered during one of the two semesters. If a transfer student, make sure to write to the college evaluators before transferring re any questionable courses. Send them the course syllabi. We did this for our three and had to do a few Petition of Substitution. Most students don’t even know these exist. That’s why they and parents need to READ the catalog. BTW, by doing the petitions, my 3 finished on time. DD1’s friend did not do a sub petition (even tho I kept telling her to do so) and had to spend an additional year at the transfer school.

    1. I love all of this! I agree with you 100%, although we’re just beginning our children’s educational journeys (they are 3 and 5). We plan to be actively involved and help them pay for college in a way that benefits them, but they doesn’t mean we are going to spoil them in the meantime! It does not have to be either/or. You can pay for college and still raise grateful, responsible adults.

  24. Forgot to add: I’m with you on paying for a child’s college education. You bring them into the world hopefully with the expectation of raising them to be compassionate, educated people. It may not have been the case for you, but college is an absolute necessity these days. As such, it is the parents’ responsibility to educate their child to the best of their ability. And I’m saying this as someone who had no help whatsoever and paid my way through—much easier then when tuition was $200 a semester (1972) even when making $1.55 hour at my summer job. One month’s pay paid for a year of tuition. Don’t think that’s possible these days.

  25. We’re definitely saving to contribute to their college. I also work at a college where one of the benefits is tuition remission for employee’s children. I’d like to have that as an option for them, too.

  26. We are 100% with you guys!!!! My dad paid for my education and it is something I want to give to my son in return, but beyond that, I feel as though it is my job to help my son to live the best possible life that he can live and straddling him with $100,000 in student loan debt just doesn’t seem like the right way to go about that. I don’t care if my retirement is delayed or I go without, to me, this is what parenting is all about.

  27. Even though my parents were in debt, they had a very small amount saved up for me in mutual funds. I think my mom put $50/month in there for several years, and in the end, the balance was maybe $6,000. Not enough to cover everything, but I was grateful nonetheless as it paid for my one year at community college. They also helped me out with textbooks. I see other bloggers who had their education paid for and are still very responsible with their finances and grateful not to have student loan debt. If I do have kids, I’d want to help them out. If I can afford it, there’s no reason not to – I’d rather not watch my child be buried under student loan debt knowing I could have helped them.

  28. This is a great post. My parents helped me pay for my college tuition, but they did decide I should cover my own living expenses (for the most part). This gave me the best of both worlds – I didn’t have to stress about paying tuition, and I got responsibility of working to pay for my own living expenses. I only had to take out student loans for my last year of college tuition because the amount they had saved ran out.

  29. Ben @ The Wealth Gospel says:

    I think it’s really up to the parents. I don’t know if I’ll plan on paying for my kids’ college costs, but if I have enough money at that time, I’ll probably pitch in a little. My parents didn’t help me and I worked my way through. Part of me wants my kids to be able to learn that financial independence, but I also understand that it depends on the person, so it’s lame to just make blanket statements for all your kids. I also don’t judge others who choose to pay for their kids’ college.

  30. catherine says:

    We are saving so she doesn’t end up deep in debt like I did. I have no regret about the debt I took on for my education but the restraint it has put on my life has been awful. We’re saving what we can without putting any compromise on our own financial goals. We’re starting small every month and always ask for money for gifts for her instead of dumb toys she won’t play with and put that away too. When our debt is paid off in a few years we’ll bump up what we contribute too. It may not pay for it all but it will certainly help!

  31. We’re going to help how we can, but if we have to make a choice, we’re going to pay for our retirement before we pay for Daughter Person’s college. We *are* saving some every month for her, and any extra from grandparents goes towards her 529. Unfortunately, the tax break here in PA doesn’t make up for the lack of decent options in the account – the tax advantage would be eaten up in fees. We’re continuing to contribute to our VA 529 plan though 🙂

    I had my entire undergraduate paid for – and I actually wasn’t allowed to work my freshman year (I did anyway, as a computer lab helper). My dad’s reasoning was that school was my job. He and mom paid for it all – and I got a free ride to grad school. I don’t think it made me work any less hard. I think it’s totally dependent on the kid as to what their work ethic is.

  32. At the very least, you need to give them the tools to go, if not the tuition. Like free housing at your home while they attend community college. Or a summer job at your business. But a full ride is even better!

    Great job! Do not leave their college tuition for me to pay.

  33. My parents paid for my schooling and it was the best gift they ever gave me. I’m not sold on college as a concept, so I think I’m going to help my kids finance a gap year after high school doing something like volunteer work and travel, and then help them financially with whatever they decide to pursue after that.

    I’m also secretly hoping I get really rich and can pay my parents back for school giving them some sweet extra retirement money 😉

    1. A gap year is a great idea. My wife took a gap year to work, save and also have fun. She says it really helped her appreciate her college education that much more.

  34. I have heard many people, especially in the “entrepreneur community” stating that college is less and less of a necessity in the coming years and that many people are taking on student loan debt for no good reason at all.

    This may be true for some careers and degrees.. But I don’t believe it is true for most of them. I got a college education and plan to offer the same opportunity to my children, no matter what.

    Kudos to you and greg for having a plan.

  35. We plan on saving, but also plan for our kids to be responsible for a certain portion (say, 10%) as well, even if we have the money to pay for it all. We want them to have some skin in the game at that point.

  36. We just had our first child and we’ve started to talk about saving for college. Both my wife and I agree that we should only pay for half. If we start saving now we could have the means to pay for the whole thing but we think its a good idea for our daughter to be “invested” in her own education. We’ll encourage her to work part time in high school and try to get scholarships and bursaries to help pay for the rest. That’s just us. I know there are probably many others who would choose differently.

  37. That is so nice of you! I think it’s great if you can help. My parents didn’t help me with tuition at all. This was hard for me to deal with as I’m an only child and they make over 100k — it didn’t make sense to me. But they did let me live at their house for undergrad and have helped me in other ways. While I hate my student loan debt, it has taught me so much humility and given me the drive to really work hard and pay it off on my own.

  38. I think there are arguments for both sides. I think paying for your own education teaches you some good, hard lessons about money, saving, and independence that you certainly can’t/won’t learn if you get a free ride, but you are right. College is expensive and some kids would rather not go than pay for it. I would say paying for it is certainly a better alternative to having them take out loans.

  39. I am a mom of two, one just graduated college and went to grad school the other is a sophomore in college. We didn’t save a nickel. My husband and I paid for 100% of our college educations. It was a battle, but we both graduated without debt.

    My sons both got scholarships. They were not full ride though. We paid for almost everything from the balance of tuition to books, parking, cars, maintenance, gas, clothes, food, lunches out, computers, calculators, apartments, everything!

    We did it because my husband and I wanted our children not to be as stressed as we were. My oldest is now debt free and on a full ride for his PhD, my youngest just got his first job… It’s all coming together.

    My husband and I are very happy with the kids doing so well. They are on track to have degrees in fields they love without debt.

    I have worked from day one with the kids on money issues, budgeting, saving, investing and being a smart consumer. So far, so good.

  40. Lucky kids with the parents who “want them to struggle like I did”… Isn’t the idea to give your kids a better life than you had?! I can’t imagine what the cost of college will be when my daughter is at that stage, but we will certainly help her out as much as possible. For now, we’ve started saving her cash gifts for her.

  41. This is a great post because many people simply get caught up in raising their kids and delay saving for their education thus missing out on the power of time and compounding investment interest/dividends. The statement you made regarding saving for college doesn’t have to get in the way of saving for retirement is right on. We paid for our kids college/secondary education but as someone who raised 3 kids and also retired at age 51 I can say it never goes like you planned. Kids are people and even siblings can be very different. My son ended up being the artistic hands-on kind of person and went to a trade school to become a custom automotive painter. One daughter started community college and 6 months later felt she would rather experience life outside of the classroom. The other daughter did a full two years at community college and then moved on to more education. We set up education-funding limits to what we would fund and let them choose their path. If they wanted to spend over I then wanted them to have some skin in the game and pay for some of it. All 3 ended up successful, even my daughter who dropped out of college who now manages a large pediatric dentist office. I think having them start out their adulthood without obscenely large student loans is very important. My kids chose paths that I was able to pay for with savings and a couple of years of $550 a month payments. Save as much as you can without disrupting retirement savings, save as early as you can, when the time comes set some limits and if necessary don’t be afraid to have them invest in themselves and have some skin in the game.
    One final note. After college, you then better have a Wedding fund started. Once again, something we loose track of saving for when we are caught up in daily life of raising our children. They all grow up, eventually.

  42. I admire what you’re doing. The consequences of starting your working life as a new graduate with a such a massive financial burden are scary. Saving for your kids now will give them a huge advantage. The real tragedy is that sometimes the debt increases in size faster than it can be paid off, resulting in debt slavery. College fees were recently tripled (no, you didn’t read that wrong) in the UK and I think that will have a dramatic effect on the lives of my generation.

  43. I really like your plan, especially how you’ll be able to cash flow from your rentals – smart move! Also, I really admire your planning. As someone who graduated with $206,000 in student loan debt, I would’ve done anything to not be this far behind the eight ball upon graduating. Your kids should be incredibly grateful!

  44. I think it’s very responsible and admirable to pay for most (or all) of a child’s education costs. My parents helped me out with tuition and I’m very grateful for it. I worked hard during the summers and saved everything I could to pay for the costs of school. Student loans are very common these days but if they can be avoided the student is much further ahead when they graduate compared to their peers that are saddled with debt

  45. Lisa E. @ Lisa vs. the Loans says:

    As long as you can afford it while also saving for your own retirement – then go for it! I think there’s room in a budget for both.

  46. I always see everyone say you need to focus on your retirement not your child’s education. I actually feel savings for my child’s education is one of the best investments. I created them and our goal as parents is to provide for our children. We don’t just have them and let them go a few years down the road. If I invest in my child’s education, then they won’t have to rely on me when they are out of college.

  47. Great article. I like to tell people to take care of yourself first. If you don’t, your kids will then be sacrificing later in life taking care of you. If you are in great shape then there is no reason why you can’t have a goal to help your kids save for college. It’s just not the same argument that parent’s worked their way through school. They probably could back then, but it’s a changed landscape today where the rise of tuition has been too high for most kids to pay their way through.

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