College fund - yes or no?

[Anonymous]

I realized after discussing with our circle of friends that not a single one of them has put away money for their kids' college funds. They decided to put their money elsewhere - mostly into their house, but also more comfortable spending money on things like lessons and activities and camps for their kids, and on family vacations and entertainment.

We are on track to saving enough to fund their entire college education. We would not qualify for need-based financial assistance. College is dizzyingly expensive. Are we making a mistake by putting money into their college funds?

[Anonymous]

Everyone's financial landscape is different. I have one child and we have college paid for via income producing real estate. We don't have a 529 and it would not help our taxes to set one up. There is no day to day money we need to set aside to make tuition payments. I am one of three siblings. We all had college paid for 100% by my parents using the equity in their primary home. Other people may use their inheritance or family money to pay or like my DH worked his way through and paid cash for his tuition. Do what works for you, don't worry about what others are doing. You never know what goes on with people and their money.

[Anonymous]

They're probably expecting to have their kids' college paid for by other means, either rich grandparents that they don't bring up in conversation with you or magical thinking about scholarships. You are not wrong for saving for college, but you already know that, you just want a pat on the back for being a better parent than every single person in your circle of friends.

::pat, pat::

[Anonymous]

It's a personal choice that only you can make - so don't worry about what other people think/do. The one generally accepted belief is that you have to be sure your retirement savings is being/will be funded properly above all else... the whole "you can't borrow money to pay for retirement, but you can borrow money to pay for college argument." Which makes sense of course. So if you can't afford to do both you should be prioritizing saving for your retirement.

If you can afford to do both and want to give your children a financial leg up in life, then you should decide how much you can afford to save for their college. My wife and I are fortunate enough to have had our college paid for by our parents and we want to do the same for our kids, so we are saving for both our own retirement and kids college savings. Our goal is to be able to cover the FULL cost of an in-state college (Va), maybe more depending on what happens with the stock market in the next 6 years. The rest goes towards our own retirement.

I don't know anyone who is choosing summer camps and vacations over college savings - so I can only assume those families have limited financial capacity to do it all. In the end there are many kids that have to pay for college - so its not the end of the world if you can't swing it all. But only you can decide how much to spend on camps and vacations IF it means you cannot help your kids with college as a result. It's probably not a black and white, all or nothing, decision.

[Anonymous]

I am sure your friends are not Asian-Americans. Asian-Americans save for their kids future first.

[Anonymous]

Short answer: It sounds like you can afford it, so there's nothing wrong with giving your kids this financial assistance. As a parent I would do all I can (realistically afford to) in order to help give my kids a better life.

[Anonymous]

Anonymous wrote:I am sure your friends are not Asian-Americans. Asian-Americans save for their kids future first.

Makes me wonder if that's why there seems to be more Asian-Amercian households that are multigenerational, with the grandparents living with their kids' families in retirement. I get it may also be a cultural choice or preference, but it would also make sense if the parents spent a large chunk of their savings on putting a few kids through college.

[Anonymous]

Anonymous wrote:I realized after discussing with our circle of friends that not a single one of them has put away money for their kids' college funds. They decided to put their money elsewhere - mostly into their house, but also more comfortable spending money on things like lessons and activities and camps for their kids, and on family vacations and entertainment.

We are on track to saving enough to fund their entire college education. We would not qualify for need-based financial assistance. College is dizzyingly expensive. Are we making a mistake by putting money into their college funds?

Unless they make less than 150K, they won't likely won't qualify for any need-based financial assistance either. They will just be scrambling to figure out how to fund $40-50K+ per year once kids are college aged.

You are not making a mistake---if your kids attend a school with merit award, you can withdraw from the 529 to match the award without any penalty (if you don't just want to leave the $$$ in the 529 for grad school, other kids, grandkids, etc). You will not be figuring out how to cash flow $50K+ for 4 years and that will be a good thing

[Anonymous]

Anonymous wrote:They're probably expecting to have their kids' college paid for by other means, either rich grandparents that they don't bring up in conversation with you or magical thinking about scholarships. You are not wrong for saving for college, but you already know that, you just want a pat on the back for being a better parent than every single person in your circle of friends.

::pat, pat::

I don't know what OP would have to gain, emotionally speaking, from soliciting a "pat on the back" from random d-bags such as yourself.

[Anonymous]

Anonymous wrote:I realized after discussing with our circle of friends that not a single one of them has put away money for their kids' college funds. They decided to put their money elsewhere - mostly into their house, but also more comfortable spending money on things like lessons and activities and camps for their kids, and on family vacations and entertainment.

We are on track to saving enough to fund their entire college education. We would not qualify for need-based financial assistance. College is dizzyingly expensive. Are we making a mistake by putting money into their college funds?

I would be concerned about the kids of friends and their options. I consider saving for college and having a plan as part of the responsibility of being a parent. Maybe their plan is for their kids to live at home and go to CC first yo save. We saved and were able to pay for our children’s college in full (minus their spending money - that was on them). We recently paid the last tuition payment. We did it on less than many posters here say is the donut hole.

You are doing the right thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They're probably expecting to have their kids' college paid for by other means, either rich grandparents that they don't bring up in conversation with you or magical thinking about scholarships. You are not wrong for saving for college, but you already know that, you just want a pat on the back for being a better parent than every single person in your circle of friends.

::pat, pat::

I don't know what OP would have to gain, emotionally speaking, from soliciting a "pat on the back" from random d-bags such as yourself.

If you're unfamiliar with the concept of humblebragging, allow me to be the first to welcome you to Al Gore's Internet.

[Anonymous]

One thing I like about DCUM as it is a constant reminder of how expensive college is, that we won't qualify for any aid, and there is no way I can afford to cashflow the higher end schools. I save up to the gift tax amount each year for each kid, so $17k per kid in 2023.

[Anonymous]

Why do you care what other people do? If putting money in a 529, or whatever you mean by a college fund, that is great. For us, we put money in a 401k, because the tax benefits offset the downside of locking the money up. We don't put money in a 529, because I don't feel the tax benefits offset the disadvantages.

When college comes we will provide the amount of financial support we want to provide. For us, that means 100% of tuition, on campus housing, meal plans, and some spending money. If they chose to live off campus or cook on their own we will have discussions about what is reasonable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:They're probably expecting to have their kids' college paid for by other means, either rich grandparents that they don't bring up in conversation with you or magical thinking about scholarships. You are not wrong for saving for college, but you already know that, you just want a pat on the back for being a better parent than every single person in your circle of friends.

::pat, pat::

I don't know what OP would have to gain, emotionally speaking, from soliciting a "pat on the back" from random d-bags such as yourself.

NP and I agree OP is looking for commendation. Her words:
I realized after discussing with our circle of friends that not a single one of them has put away money for their kids' college funds. They decided to put their money elsewhere - mostly into their house, but also more comfortable spending money on things like lessons and activities and camps for their kids, and on family vacations and entertainment.

We are on track to saving enough to fund their entire college education. We would not qualify for need-based financial assistance. College is dizzyingly expensive.

And then the non-question she ends with, which she already knows the answer to: Are we making a mistake by putting money into their college funds?
[i]

Do you really think her friends are saying they decided to put their money into other things? No- she sees her friends spend on other things and then judges them. OP is looking for a “great job, you!”

[Anonymous]

As long as you are saving enough for your won retirement, no. I would not save for college at the expense of your retirement though. You cannot borrow for that.