Did you folks not do ANY saving?

[Anonymous]

We’re not low income by any metric except DCUM. But we also couldn’t save anything meaningful for my older DD, despite living a very modest lifestyle (2 bedroom apt, used cars, never been to Disney, etc.) One set of grandparents declined to offer any money because they tied it to religious identity for the other grandkids. My mom was very generous, but even with a half-scholarship, we couldn’t swing DD’s dream school. Ultimately, it turned out well as she ended up in a good program at a state school that provided amazing job contacts.

There’s a bit of money for my younger DD, but at this point, she’s likely to earn full scholarships. That will be a deciding factor in where she goes. And we’re okay with that.

[Anonymous]

Our kids are sharing the GI bill and we knew that our HHI would triple by the time the kids were in school. We assumed we’d be paying for it then, the kids are expected to apply for scholarships, and they can work or take out loans for what’s leftover. We don’t want them to be saddled in debt, but we also don’t think it’s a bad idea for them to be financial invested themselves. DH earned a free education at an academy. I was expected to pay for my own and did.

I’ve had my car for 10 years and it has 193,000 miles on it, btw. But it sounds like you’d find other reasons to judge us. We’ve spent money on some private schools and expensive extracurriculars. All of it was worthwhile and it’s all working out well so far (one in college with a full tuition scholarship and affordable housing, saving the GI Bill for grad school)

[Anonymous]

Anonymous wrote:

Anonymous wrote:My Ivy alma mater is now $74,000 a year. As a reference when I graduated in 2002 it was just about $34,000. Today, four years at my alma mater, assuming no increases, would be just shy of $300,000. But I'm still years away from paying college bills so who knows what it will be in six years' time (it almost makes me sick to think about it as college costs still increase well beyond the rate of inflation and most people's pay increases). There's a certain arrogance in your assumption that people can easily save $300,000 x # of kids over 18 years, when they still have to live a life, raise a family, pay for a place to live, feed themselves, pay their taxes, pay for emergencies, and put aside money into retirement savings. I'm guessing you're one of those people who started his first job in investment banking and has always been making six figures since he was 22, or something similar, and you have no clue that for most people the trajectory to a higher HHI is one that requires patience and time and progression through the career ladder, with even setbacks along the way.

We manage to save quite a lot by being frugal but it does seem like no matter how hard you try the costs of life outpaces what you can manage to save so your hypothetical savings you calculate at the onset of the year rarely come to fruition. We are fortunate that we can save what we can, and we will, barring any unforeseen emergencies or changes in life, be able to swing the college costs. But I am already starting to ask if it's worth it. If it's a choice between my alma mater and in state at a good flagship or another college with a big merit, I'm tempted to encourage the kids to go that route and use the differential to help buy them a house or even to pay for graduate school, which is increasingly more important than your BA these days. Or even just put the differential into a fund and tell them they can't touch it until they turn 70. To be honest, I'm increasingly bitter at the high college costs because there's absolutely no way they're justified nor does it make any sense whatsoever.

Great post which captures the trajectory of many UMC families in the DMV. Our family joke is that we have saved enough to send DS to any school of his choice in 2002! We can afford a $50-55k college but there aren’t too many top rated colleges at this price point (and ds’s stats do place him in the 99+ percentile). We have a modest home (typical older house in DMV that needs a lot of TLC) , cars that are 18 and 8 years old and most of our furniture is from Ikea. So while I feel grateful for what we have I do feel frustrated that we cannot give ds the same opportunity our parents gave us - to go to the best school we were admitted to. We have been talking to ds about this for years now so he is prepared to make some tough choices. He has also seen older friends who are in a similar situation turn down dream schools for UMD. He is a good kid and would try to be sensible but as his parent I feel sad that we couldn’t save more.

You could make up the difference between your savings and your DS' dream school cost by cosigning a student loan (may be unsubsidized in your case) or by taking a line of credit from a bank on the equity in your house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Aren't most people still working when their kids are in college? I'm saving for both my kids, but I'm also assuming that large amounts of my paycheck during their college years will be going towards paying their college expenses. Why are people thinking they need to have saved the total amount by the time their kids start college?

+1. By the time my kids go to college, we're projecting that'll we have saved about half about their college expenses. Which makes it easier to pay the rest from our salaries. If college is $74k a year, half of that is $37k, which is basically what we paid during the daycare years with no savings at all, and when we both earned so much less than we do now.

+2 If you could afford to pay a big childcare bill then you can cash-flow a good chunk of college expenses -- and could have saved for college once that daycare bill was done. (unless big things came up like job losses, medical bills, extraordinary child expenses, which certainly can derail the best plans for college savings)

I agree this is true for people who were able to cash flow 37K daycare. But many, many 'donut hole families' in this area didn't pay that amount and dipped into prior savings for daycare in order to build careers. After care/summer care continued since then. The range of situations of people that won't get financial aid except loans for colleges that will cost 30k-80k/yr+ is far wider than just those making 200+ now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Aren't most people still working when their kids are in college? I'm saving for both my kids, but I'm also assuming that large amounts of my paycheck during their college years will be going towards paying their college expenses. Why are people thinking they need to have saved the total amount by the time their kids start college?

+1. By the time my kids go to college, we're projecting that'll we have saved about half about their college expenses. Which makes it easier to pay the rest from our salaries. If college is $74k a year, half of that is $37k, which is basically what we paid during the daycare years with no savings at all, and when we both earned so much less than we do now.

I opted to be a SAHM. I only recently began working. Not sure how we will make it since we are by definition a donut hole family. Seems unfair that our current income is counted against us. Considering staying home, again, until kids are out of college. May make more sense, tbh. Then we can get FA.

Holy crap. Read this again, PP.

You are complaining that it's unfair that your current income is counted against you, when you removed yourself from the workforce for years. Moreover, you're considering doing it again, so you can get aid?

You aren't ashamed of yourself, typing this out?

Since you went without your income for so long, and apparently comfortable doing so again, you should be able to direct that income entirely to college. That'll help.

Again, giving low income kids a hand - great. Giving "aid" to families who decided to not do all they can to pay for college themselves? No thanks.

+100 PP the idea that you think your kids should get the same aid as kids that are going to college from impoverished homes because you didn't want to work for most of their childhood is deeply gross.

[Anonymous]

And this is what’s separating the next generation of UMC and LMC, sadly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Aren't most people still working when their kids are in college? I'm saving for both my kids, but I'm also assuming that large amounts of my paycheck during their college years will be going towards paying their college expenses. Why are people thinking they need to have saved the total amount by the time their kids start college?

+1. By the time my kids go to college, we're projecting that'll we have saved about half about their college expenses. Which makes it easier to pay the rest from our salaries. If college is $74k a year, half of that is $37k, which is basically what we paid during the daycare years with no savings at all, and when we both earned so much less than we do now.

I opted to be a SAHM. I only recently began working. Not sure how we will make it since we are by definition a donut hole family. Seems unfair that our current income is counted against us. Considering staying home, again, until kids are out of college. May make more sense, tbh. Then we can get FA.

Holy crap. Read this again, PP.

You are complaining that it's unfair that your current income is counted against you, when you removed yourself from the workforce for years. Moreover, you're considering doing it again, so you can get aid?

You aren't ashamed of yourself, typing this out?

Since you went without your income for so long, and apparently comfortable doing so again, you should be able to direct that income entirely to college. That'll help.

Again, giving low income kids a hand - great. Giving "aid" to families who decided to not do all they can to pay for college themselves? No thanks.

+100 PP the idea that you think your kids should get the same aid as kids that are going to college from impoverished homes because you didn't want to work for most of their childhood is deeply gross.

NP, but why? Their parents didn’t work their butts off either.

[Anonymous]

Based on what I see around here, there are many families in oblivious as to how much they need to be saving for retirement and college.

It isn’t possible to live in a very nice home, typical UMC lifestyle, retirement and college savings on 300-400k. Add in private school and it’s a disaster.

People either don’t care or don’t realize that the pretax 401k contributions even with a match aren’t enough at this income level. You need a private brokerage account and to put at least 2-3k per month into it. For each child, you need at least 1k per month for college savings at a minimum.

This means you either need to sacrifice on a house OR on your lifestyle to make this happen.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Aren't most people still working when their kids are in college? I'm saving for both my kids, but I'm also assuming that large amounts of my paycheck during their college years will be going towards paying their college expenses. Why are people thinking they need to have saved the total amount by the time their kids start college?

+1. By the time my kids go to college, we're projecting that'll we have saved about half about their college expenses. Which makes it easier to pay the rest from our salaries. If college is $74k a year, half of that is $37k, which is basically what we paid during the daycare years with no savings at all, and when we both earned so much less than we do now.

I opted to be a SAHM. I only recently began working. Not sure how we will make it since we are by definition a donut hole family. Seems unfair that our current income is counted against us. Considering staying home, again, until kids are out of college. May make more sense, tbh. Then we can get FA.

Holy crap. Read this again, PP.

You are complaining that it's unfair that your current income is counted against you, when you removed yourself from the workforce for years. Moreover, you're considering doing it again, so you can get aid?

You aren't ashamed of yourself, typing this out?

Since you went without your income for so long, and apparently comfortable doing so again, you should be able to direct that income entirely to college. That'll help.

Again, giving low income kids a hand - great. Giving "aid" to families who decided to not do all they can to pay for college themselves? No thanks.

+100 PP the idea that you think your kids should get the same aid as kids that are going to college from impoverished homes because you didn't want to work for most of their childhood is deeply gross.

NP, but why? Their parents didn’t work their butts off either.

Are you seriously comparing generational poverty to a MC/UMC SAHM probably focused on enrichment and providing a peaceful nurturing environment? The differences are deep and stark; I can only assume this question is in bad faith. Her kids didn't have to overcome her lack of income - they got all the benefits of growing up high SES plus the benefit of a SAHP.

[Anonymous]

Anonymous wrote:My Ivy alma mater is now $74,000 a year. As a reference when I graduated in 2002 it was just about $34,000. Today, four years at my alma mater, assuming no increases, would be just shy of $300,000. But I'm still years away from paying college bills so who knows what it will be in six years' time (it almost makes me sick to think about it as college costs still increase well beyond the rate of inflation and most people's pay increases). There's a certain arrogance in your assumption that people can easily save $300,000 x # of kids over 18 years, when they still have to live a life, raise a family, pay for a place to live, feed themselves, pay their taxes, pay for emergencies, and put aside money into retirement savings. I'm guessing you're one of those people who started his first job in investment banking and has always been making six figures since he was 22, or something similar, and you have no clue that for most people the trajectory to a higher HHI is one that requires patience and time and progression through the career ladder, with even setbacks along the way.

We manage to save quite a lot by being frugal but it does seem like no matter how hard you try the costs of life outpaces what you can manage to save so your hypothetical savings you calculate at the onset of the year rarely come to fruition. We are fortunate that we can save what we can, and we will, barring any unforeseen emergencies or changes in life, be able to swing the college costs. But I am already starting to ask if it's worth it. If it's a choice between my alma mater and in state at a good flagship or another college with a big merit, I'm tempted to encourage the kids to go that route and use the differential to help buy them a house or even to pay for graduate school, which is increasingly more important than your BA these days. Or even just put the differential into a fund and tell them they can't touch it until they turn 70. To be honest, I'm increasingly bitter at the high college costs because there's absolutely no way they're justified nor does it make any sense whatsoever.

Any Ivy League school seems inappropriate given your finances and the significant financial cost to your family. $70k a year colleges are pretty much a luxury good at this point. There are plenty of way more affordable state schools.

Also, you went to an Ivy and doesn’t seem like you make a lot of money. Point is that your child’s success isn’t going to be limited by not paying $70k per year for an Ivy League school.

[Anonymous]

But here's the thing, why should it be necessary to save @$100K to send your child to college?

Is the problem with the saver or the out of control costs for higher education?

[Anonymous]

Remember, it is less embarrassing for some to say they can't afford it when they make more than 98% of other Americans than admit their child is not a strong enough student to get into the Ivies+. It is their way of explaining why their kids going to second and third tier schools. Nothing wrong with it, the kids will do fine, it just points to a particularly weird socio-economic dynamic.

[Anonymous]

We are saving. Household income is about 350K and we have about 180K total so far spread across 3 accounts kids who are ages 9, 8 and 6. We are not necessary trying to full fund their college educations, but I am hoping to double that amount in the next 9 years.

[Anonymous]

Anonymous wrote:We are saving. Household income is about 350K and we have about 180K total so far spread across 3 accounts kids who are ages 9, 8 and 6. We are not necessary trying to full fund their college educations, but I am hoping to double that amount in the next 9 years.

But you will need close to $1 million, no?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Aren't most people still working when their kids are in college? I'm saving for both my kids, but I'm also assuming that large amounts of my paycheck during their college years will be going towards paying their college expenses. Why are people thinking they need to have saved the total amount by the time their kids start college?

+1. By the time my kids go to college, we're projecting that'll we have saved about half about their college expenses. Which makes it easier to pay the rest from our salaries. If college is $74k a year, half of that is $37k, which is basically what we paid during the daycare years with no savings at all, and when we both earned so much less than we do now.

I opted to be a SAHM. I only recently began working. Not sure how we will make it since we are by definition a donut hole family. Seems unfair that our current income is counted against us. Considering staying home, again, until kids are out of college. May make more sense, tbh. Then we can get FA.

Holy crap. Read this again, PP.

You are complaining that it's unfair that your current income is counted against you, when you removed yourself from the workforce for years. Moreover, you're considering doing it again, so you can get aid?

You aren't ashamed of yourself, typing this out?

Since you went without your income for so long, and apparently comfortable doing so again, you should be able to direct that income entirely to college. That'll help.

Again, giving low income kids a hand - great. Giving "aid" to families who decided to not do all they can to pay for college themselves? No thanks.

+100 PP the idea that you think your kids should get the same aid as kids that are going to college from impoverished homes because you didn't want to work for most of their childhood is deeply gross.

+1
WOW.