Kid's College Education (vacations, vacation, respect, friend)
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I think it's important to distinguish the difference between the retirement vs college education prioritization and the early retirement vs college education prioritization. I don't think many would argue that retirement shouldn't be prioritized over paying your kids college, it's when it crosses over into early retirement where things get hazy depending on your value system.
It would be hard for me to rationalize leaving a high paying job in my early to mid 50's to retire if I hadn't already saved enough money to cover most if not all of kids' college. Using the standard Financial Advisor guidance of prioritizing Retirement over Kids' college and then extending that advice to early retirement seems a little too self-serving from my perspective, but everyone has their own idea of what's appropriate.
I also realize that some think there is no distinction between early retirement and retirement, because making your kids pay is not a function of how much money you have it's an opportunity for the kid to build character by having skin in the game. It's not an argument I agree with and again there are personal benefits from such a perspective that I'd be constantly questioning my own motives for doing so.
My response on that other forum:
My parents paid for my schooling (including Graduate School). Same for my wife. I'm not going to ignore how much of a head start that was in our ability to be on a path for FI.
Our plan for our 2 daughters is to pay for their education as well. This plan is a "pay it forward" model and we expect that model to be carried to the next generation. This isn't for funding a lavish lifestyle because they have no debt like most of their friends are likely to have. One idea I have been tossing around is paying for undergrad and then they can take out loans for grad school. As they start their careers and they add money to their 401k's I will make an in-kind payment to the grad school debt, thus increasing the chances that the pay it forward model makes it to the next generation.
The "they need to have skin in the game" arguments seem a little self-serving (better lifestyle now if not saving for College), but I realize there are often competing priorities (retirement, elder care, medical, etc.). No doubt though that Children need both an understanding of money and a work ethic. The foundation seems to crumble without those in place.
At the risk of stirring up the hornets.....that is a thoughtful approach. As I mentioned in my posts, we started saving the year she was born, and rather painlessly built up a goodly sum of money. By the time we took her around to look at various colleges, the funding was never going to be an issue. She could pick the school and the major she wanted.
There are some Grants and Scholarships available, but Financial Aid is a Myth. Unless you're living in a cardboard box under the expressway....you're making too much money for aid.
Well this is the very crux of the whole debate. Whether you want to treat your children as Children at 19 or as adults. Children are dependent on adults to pay their way. Adults pay their own way.
Quote:
Originally Posted by xxEHxx
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The "they need to have skin in the game" arguments seem a little self-serving (better lifestyle now if not saving for College), but I realize there are often competing priorities (retirement, elder care, medical, etc.). No doubt though that Children need both an understanding of money and a work ethic. The foundation seems to crumble without those in place.[/i]
Well this is the very crux of the whole debate. Whether you want to treat your children as Children at 19 or as adults. Children are dependent on adults to pay their way. Adults pay their own way.
I consider nineteen-year-olds young adults who still have a lot of learning ahead of them. They are nearly grown but I wouldn't exactly say they're quite ready for prime time. While I admire those who can pull themselves up by their own bootstraps and fund a degree while working a full-time minimum-wage job at night, I don't feel the need to force my kids to do so given that my spouse and I have the resources to allow them to go to university without mortgaging their futures to do so. My parents did not lock me out of the house when I was eighteen and neither did my husband's. Both of us received financial and emotional support from our families while we pursued our degrees, and we are doing the same for our children. As long as they are committed to their degree paths and otherwise behaving responsibly, I'll keep writing the tuition checks. That doesn't mean the pot of money is bottomless, of course, but four years of university for a kid who has talent and drive seems reasonable given we have the capacity to provide for it.
Last edited by randomparent; 08-30-2018 at 03:49 PM..
We paid 1/2 of everything room, books, tuition for our DD - she had 1 year of college under her belt when she graduated high school, so only 3 years at University. She took out minimal loans - She might have 15K in loans - she worked at the University library the 2nd year she was there - with her 15K in loans we matched that or better for her. 1st her in the dorm with a meal plan - again we paid 1/2 after that she lived at home. She graduated in May 2018 and is now on her own at 21. she needs grad school to do the work she wants but is working a year or 2 before that. We are doing the same with her younger sister now.
Outside of love, food, shelter, and an upbringing that prepared me rather well for adulthood, the greatest gift that my parents were able to give me was the gift of "The Parental Scholarship." I was able to choose any school that I wished to attend with the caveat that it must be a state school and the education (outside of student teaching, etc.) must be completed within four years.
My parents were, however, a bit flexible with their criteria in the end as I ended up leaving college after completing my junior year to attend culinary school. The cost of what would have been my senior of college was similar to the cost of culinary school, so they ended up paying for school even though I had intended to finance my educational sidetrack on my own dime. I did have to cover my own rent and food, though, so attending culinary school and working both mornings and evenings before and after class meant that I entered adulthood on a somewhat faster track than my friends who remained at college for another year or two.
Over twenty years later, I have few, if any regrets, about my decision. It's not an easy trade. It's physically demanding and takes a toll on one's social and family life, but it's rarely dull, often challenging and a heck of a lot of fun at times. Not everyone is lucky enough to have work that they love; the fact that my parents paid for school meant that I was able to take on gigs which, while they didn't always pay much, gave me connections and knowledge that led to bigger and better things that *did* pay well.
In the end, if parents can afford to pay for schooling of some sort without sacrificing their retirement nest egg and have a child who's a go-getter who won't waste parental tuition dollars on partying, I cannot see why parents would *not* want to pay for their child's higher education. The lack of the burden of student loan debt really does give a young person a leg up both personally and professionally.
My motives to pay for college may not be 100% altruistic. If I'm paying for college there is ZERO reason for you come back home after graduating college. Those parents who don't pay for College are more likely to catch the back end of a boomerang when they ask to live at home to save money because of their student debt. I don't want to risk a failure to launch scenario. I feel like I'm capping my downside. Expecting a clean break at 18 may be a bit much, but at 22-24, nah, you need to find your way. I'd rather they focus on the summer employment on opportunities that have the most impact on future career opportunities (see capping downside comment above) and those may or may not even be paid opportunities as opposed to maximizing income to pay the ever increasing education costs. This is not only an investment in their future but mine.
I'm 32 and went to college at the regional state university nearby. When I started at 18 in the fall of 2004, the "all-in annual cost," sans room/board/meals, was roughly $5,000. That's nearly $10,000 today. The state flagship is considerably more expensive than that.
You can fairly easily run up a six figure "sticker price" education at a public university without room and board, and with no financial aid.
Oh, and unless you're majoring in STEM or something that leads directly into the workforce like nursing or education, that education is probably not going to be worth it for many years after graduation. I graduated into the recession, but it took for four years for me to find a job for which my degree was a benefit. It took another year or two to make the student loan debt (around $9,000) and opportunity cost worthwhile for where the degree was a positive ROI.
There are also tons of horror stories out there about underfunded retirements. You've got to take care of yourself first.
Did you ever hear of medical or dental school? Or vet school? Med schools now have more openings than there are qualified applicants. It's not 1974 anymore.
Paying 50K to graduate and wind up waiting tables is pretty foolish.
Did you ever hear of medical or dental school? Or vet school? Med schools now have more openings than there are qualified applicants. It's not 1974 anymore.
Paying 50K to graduate and wind up waiting tables is pretty foolish.
This is entirely the college's fault for not filling seats, and directly contributing to the high cost of an education. Keep the graduation requirements the same, for the safety of patients everywhere, but lower the bar for applicants. If they fail out, they'll at least help spread out the cost of attending a little thinner
My motives to pay for college may not be 100% altruistic. If I'm paying for college there is ZERO reason for you come back home after graduating college. Those parents who don't pay for College are more likely to catch the back end of a boomerang when they ask to live at home to save money because of their student debt. I don't want to risk a failure to launch scenario. I feel like I'm capping my downside. Expecting a clean break at 18 may be a bit much, but at 22-24, nah, you need to find your way. I'd rather they focus on the summer employment on opportunities that have the most impact on future career opportunities (see capping downside comment above) and those may or may not even be paid opportunities as opposed to maximizing income to pay the ever increasing education costs. This is not only an investment in their future but mine.
I know for a fact that what you wrote was an added bonus for my parents, although boomerang-ing back home was far less common in the late nineties than it now is. I think the difference between now and then outside of the rising cost of education is that most parents "back then" held the view that if an adult child were to move back back/remain home for any length of time after completing his or her education, house rules would be enforced. Curfews, no sleepovers of romantic partners, etc. I'd rather have couch surfed or lived with a half-dozen other young people than have done that--and most of my friends and acquaintances felt the same way.
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