I’m really surprised how many people don’t save for college

[Anonymous]

Maybe they think that their kids can figure out the cost of college by themselves?

[Anonymous]

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Anonymous wrote:Ok, so I guess I’m ‘one of those people’. I’m a single parent that’s made 200+ since my kids were born. I save $1,500 per child per month and - guess what - that’s still not enough.

Why? Why, you ask? Why am I not saving more? Because I want to retire at 62. I want to live in a modest house and travel internationally. I want to support my kids in their (expensive) activities. I want them to live independently at an amazing camp in Maine 4 weeks every summer so they can meet people outside our suburban town. I want to enjoy dinners out with them, and theatre, and fun days at the spa.

So yes, op. My measly $1,500 will not be sufficient and we will not qualify for financial aid. But you know what? I was raised with a work ethic that allowed me to pay off 6 figure debt. This is not what I want my kids to face, but if they do, I’d like to think they have the work ethic and possibly my support to pay it off.

Adding to PP's poignant description, I will add that it's a shitty country that makes people choose between enjoying their hard-earned income, and tightening their belts to send the next generation to earn their expensive degrees.

Other wealthy nations subsidize universities and lower tuition costs. The USA should do the same.

But it is not always rainbows and unicorns in other countries. The European model does allow for gov't subsidies for university but guess what? Not everyone gets to attend one. Students are tracked in high school (or younger) and those who score well attend and those who do not or are late bloomers, well, no university for them. The US system has plenty of flaws but only having a restricted number of seats is not one of them.

That sounds more fair than high stat kids from donut hole families not able to afford top schools here

Fair? Your kid has no right to attend an expensive college. It is a LUXURY item like a Porsche. “Donut hole families” is a made up thing that people use to feel better about not being able to pay for their kids to attend private colleges. You are bitter and jealous of families that are richer than you and can afford to write the tuition check without a second thought.

You are stating exactly how it is unfair, top colleges are for rich kids only

A Rolls Royce is only for the rich, but there are lots of excellent cars that the non-rich can buy. So is it unfair that you can't have a Rolls? And you can always take out loans if you MUST have a so-called "top" school.

I'm thinking many of these people might have had more to save for college if their mindset was different. They feel entitled to a "luxury item" and have bought into the idea that only T20 schools are worth it for their snowflake. Many I have met with that attitude also spend on luxury items that are not essential and likely could have made different choices and actually saved much more for college. No one is entitled to attend an elite/top school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Sigh. Stop trolling.

I’m not trolling. I’m genuinely surprised how shortsighted people are with relatively high incomes. If you had a lower income, you would qualify for financial aid.

I’m specifically thinking of people who dress well, drive nice cars, vacation often, kids do expensive extracurricular activities, maybe go to private school. They have UMC lifestyles and didn’t save for college.

My family doesn't live large, but we don't have a lot saved for college. The reason being that I was a SAHM for several years. The plan was to live on one salary, for me to start working again when the oldest was in high school, and for us to devote my salary to college. An older colleague executed this plan perfectly. Then my husband died. Things happen.

yes, things do happen. I'm so sorry for your loss

However, did you have life insurance on your husband (and yourself)? Once you have kids, it is essential to have full needed coverage on both parents.

Also, this is a choice that you made----staying home and not having enough life insurance to fund college---typically life insurance should be enough to get all kids thru age 22, including college costs. No way would I have chosen to stay home with my kids without enough life insurance to protect the family should something happen to either parent (the employed parent as well as the SAHP).

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t understand saving for college.

We just pay for it out of our income.

We only make $250 but $60K / year is not that big of a deal once your kid did private school for 12 years. It’s just part of the budget.

That’s also what I think, although we have 529’s. When our kids were in daycare we were paying 30k per year, why can’t we just do it again? (Granted that means choosing an in-state school and not retiring early).

If you were paying 30K/year for daycare (assuming 2 kids), why didn't you just redirect 80%+ of that to 529s for your kids? If that were done, you would likely have $200K+ in each kid's 529. And yes, could easily use that plus the cash flow to pay for college. Obviously retiring early is not really possible if you have kids not yet thru college unless you have enough saved to fully fund college. But that could be part of a viable retirement plan/college plan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The answer is pretty simple. A 529 is a tax-deferred savings vehicle, but so is my 401k and my wife’s 401k. If I have limited savings, I’m going to max out my 401k before funding a 529. Also, if you fund a Roth, you can take money from there before 59 1/2 for education. Finally, VA has great in-state colleges. Go to one and you’ve already saved a ton relative to your friend who sent their kid to a no-name SLAC. At $300-400k, I can cash flow a public, in-state school. The only people who must save for college are those who seek the right “fit” at an overly expensive college. You may think that’s worth it, but a lot of people don’t.

Not everyone makes that much. People in the 100-250k are screwed bc they don’t qualify for aid and might not be able to afford college for two kids at the same time.

Then plan to space your kids a bit further apart. Mine are purposefully over 4 years apart so only 1 would be in undergrad at the same time (just part of the consideration---much more went into planning the age differences--largely the first kid and their needs as well dictated this, but I definately thought only 1 in college at same time would be a huge benefit financially ).

[Anonymous]

Anonymous wrote:I don’t understand saving for college.

We just pay for it out of our income.

We only make $250 but $60K / year is not that big of a deal once your kid did private school for 12 years. It’s just part of the budget.

Yes, this works, too, if you don't have substantial expenses allocated elsewhere. You are likely "living within your means."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:Ok, so I guess I’m ‘one of those people’. I’m a single parent that’s made 200+ since my kids were born. I save $1,500 per child per month and - guess what - that’s still not enough.

Why? Why, you ask? Why am I not saving more? Because I want to retire at 62. I want to live in a modest house and travel internationally. I want to support my kids in their (expensive) activities. I want them to live independently at an amazing camp in Maine 4 weeks every summer so they can meet people outside our suburban town. I want to enjoy dinners out with them, and theatre, and fun days at the spa.

So yes, op. My measly $1,500 will not be sufficient and we will not qualify for financial aid. But you know what? I was raised with a work ethic that allowed me to pay off 6 figure debt. This is not what I want my kids to face, but if they do, I’d like to think they have the work ethic and possibly my support to pay it off.

Ummm...so I don't think the OP is talking about someone saving $18K per year per kid.

+1 you should have a minimum of 400 K if this money is in an interest-bearing account

If pp had invested $18,000 a year at the DJIA beginning in 2003, the account would have been worth $830,000 in 2021. Even with stock market losses in the last year, the account should still be almost $700,000 per child. That’s enough for college and graduate school.

How many people were making enough 20 years ago to save over $1,000 a month for college? I was making $50-60/ year driving my dodge neon.

[Anonymous]

The problem is that the government subsidizes colleges to become infinitely expensive. If the government got out of the loan business, tuition costs would plummet (and there would be no gold-plated dining hall - but oh well). Op should start advocating for sensible policy change instead of nosing around the finances of others.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ok, so I guess I’m ‘one of those people’. I’m a single parent that’s made 200+ since my kids were born. I save $1,500 per child per month and - guess what - that’s still not enough.

Why? Why, you ask? Why am I not saving more? Because I want to retire at 62. I want to live in a modest house and travel internationally. I want to support my kids in their (expensive) activities. I want them to live independently at an amazing camp in Maine 4 weeks every summer so they can meet people outside our suburban town. I want to enjoy dinners out with them, and theatre, and fun days at the spa.

So yes, op. My measly $1,500 will not be sufficient and we will not qualify for financial aid. But you know what? I was raised with a work ethic that allowed me to pay off 6 figure debt. This is not what I want my kids to face, but if they do, I’d like to think they have the work ethic and possibly my support to pay it off.

Ummm...so I don't think the OP is talking about someone saving $18K per year per kid.

+1 you should have a minimum of 400 K if this money is in an interest-bearing account

If pp had invested $18,000 a year at the DJIA beginning in 2003, the account would have been worth $830,000 in 2021. Even with stock market losses in the last year, the account should still be almost $700,000 per child. That’s enough for college and graduate school.

How many people were making enough 20 years ago to save over $1,000 a month for college? I was making $50-60/ year driving my dodge neon.

Exactly. I was barely subsisting paying off my own college loans. Stupid me, should have just stuck my fellow tax payers with my bill.

[Anonymous]

Anonymous wrote:Ok, so I guess I’m ‘one of those people’. I’m a single parent that’s made 200+ since my kids were born. I save $1,500 per child per month and - guess what - that’s still not enough.

Why? Why, you ask? Why am I not saving more? Because I want to retire at 62. I want to live in a modest house and travel internationally. I want to support my kids in their (expensive) activities. I want them to live independently at an amazing camp in Maine 4 weeks every summer so they can meet people outside our suburban town. I want to enjoy dinners out with them, and theatre, and fun days at the spa.

So yes, op. My measly $1,500 will not be sufficient and we will not qualify for financial aid. But you know what? I was raised with a work ethic that allowed me to pay off 6 figure debt. This is not what I want my kids to face, but if they do, I’d like to think they have the work ethic and possibly my support to pay it off.

What makes you think you will not have "enough?" Haven't you been investing it?? The past 10 years have been a Bull market, outside of the last one.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t understand saving for college.

We just pay for it out of our income.

We only make $250 but $60K / year is not that big of a deal once your kid did private school for 12 years. It’s just part of the budget.

Yes, this works, too, if you don't have substantial expenses allocated elsewhere. You are likely "living within your means."

This is us - planning on cashflowing on a $250k income. But we are paying $30k a year for private now, which makes it easy to avoid too much lifestyle creep! It’s forced us to make choices along the way that will help us get through the college years (one car, bought a house that cost 30% of what we “could” afford). Private school was undoubtedly a lousy financial decision (although a wonderful educational one), but at least college is going to be less of a shock to our pocketbook…

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t understand saving for college.

We just pay for it out of our income.

We only make $250 but $60K / year is not that big of a deal once your kid did private school for 12 years. It’s just part of the budget.

Yes, this works, too, if you don't have substantial expenses allocated elsewhere. You are likely "living within your means."

This is us - planning on cashflowing on a $250k income. But we are paying $30k a year for private now, which makes it easy to avoid too much lifestyle creep! It’s forced us to make choices along the way that will help us get through the college years (one car, bought a house that cost 30% of what we “could” afford). Private school was undoubtedly a lousy financial decision (although a wonderful educational one), but at least college is going to be less of a shock to our pocketbook…

NP I get that your budget can accommodate it, but what if one of you loses your job and the income isn’t there? We make slightly more and could have done the same I suppose but I never wanted to put the college education at risk, or be in a position to have to take loans if for whatever reason the income wasn’t there, so instead we planned and saved.

[Anonymous]

Anonymous wrote:It's because they want to keep up with the Jonses and the Jonses never mentioned college savings.

My blue collar "some college" in-laws in the Midwest. They have two kids the same age as our teens and they don't save a cent. They make about $150K HHI and look like a typical middle class suburban family with new American SUVs in the driveway, muscle car, pontoon, even the 17 year old son got a brand new $30K car which they leased. They don't think kids should get family help with college because they never did. They believe kids can take out loans and pay their own way. I can never tell if they're just ignorant or it's just to rationalize that they have no self control with their spending.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's because they want to keep up with the Jonses and the Jonses never mentioned college savings.

My blue collar "some college" in-laws in the Midwest. They have two kids the same age as our teens and they don't save a cent. They make about $150K HHI and look like a typical middle class suburban family with new American SUVs in the driveway, muscle car, pontoon, even the 17 year old son got a brand new $30K car which they leased. They don't think kids should get family help with college because they never did. They believe kids can take out loans and pay their own way. I can never tell if they're just ignorant or it's just to rationalize that they have no self control with their spending.

It’s both ignorant and selfish

[Anonymous]

Anonymous wrote:I think it is good for kids to have a financial stake in their education.

Spoken like a boomer who probably went to college for free and now refuses to give up their tax cuts to pay for public universities.