Today is my daughter’s first birthday, and I have big dreams for her.  I also have big dreams for her sister, who is three.  When I think of what their life may be like, I have many fears for them.  What kind of education will my children be able to afford?  What will the job market be like?  What will our planet be like as they enter adulthood?  Will they have friends?  Will they get married?  Will they ever find the happiness that I have found?  Most of these things are simply out of my control.

However, I do feel that it is my job as a parent to help them afford the best education possible.  I never graduated from college, and that is something that I may always regret.  However, I got lucky.  I have always been good with the money and have a job that I love.  My husband earned two college degrees and has a great career.  Things are good for me, but I want to give them better odds.  I want them to follow their dreams.  I do not want them to be held back by the cost of the college they choose.

Our Story

I got married in 2005, and we bought our first home in December of 2006.  We lived there for a year before buying our first rental home.  We put 10% down on a small brick ranch house that would pay for itself through its rental income.  A year later, we “traded up” and moved into a larger home for ourselves.  We turned our “starter home” into our second rental.  Originally, our rental homes were just going to be used as assets and as eventual passive income.  However, after we had our two children, I realized that we could use these rental properties to actually pay for our children’s college education.

Over the last year, interest rates have hit historic lows and we refinanced our rental properties to shorten the term of their mortgages.  The first home we bought will now be paid off when my oldest daughter turns 17.  Our original “starter home” will be paid off shortly after that.  We then plan on using the rental income to pay for part of our children’s college.  Additionally, each of our children have a College 529 savings plan and we contribute monthly.  My hope is that, when our kids reach college age, we will be able to help them avoid the crushing student loan debt that many young adults are burdened with.

Living frugally takes sacrifice and hard work. I can only hope my children will learn our financial values and appreciate our sacrifice when they are older.Teaching our Children Frugality

I rarely buy my kids toys or clothes.  When I do, it is almost certainly from a garage sale or Craigslist.  We do not have cable TV.  We eat dinner at home almost every night.  We go without.  We take frugal vacations.  We try to find things which are fun to do that are also free.  They are too young to realize it now, but as my children grow up, I’m afraid that they might hate me for this.  They might be resentful when they don’t have the brand name clothes that their friends do.  They could be embarrassed that they don’t have the high-tech gaming systems, an iPad, a fancy home, and a swimming pool.

However, if this happens, I hope that one day they may learn to love me again.  I hope that they might realize the sacrifices that we have made for them.  I hope that the choices that we have made will make their lives better.  And, my greatest hope is that one day they will be as proud of me as I am of them.