Did you folks not do ANY saving?

[Anonymous]

Anonymous wrote:

How much do you have saved, and how much less would you be paying if you did not have that savings?

When I see these discussions I would really like to see this question answered. I suspect the real data would reveal much more and that the people complaining are doing so out of frustration of the cost (and maybe some jealously/class warfare also) rather than the actual facts.

Posts with facts are useful, like the one from the informed poster here:

06/28/2019 11:44

The idea of being "punished" for saving is somewhat overblown: every 100k of savings outside of retirement accounts adds 5k to your expected family contribution to college. HHI and number of kids in college at a time are the primary determinants of EFC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We make about $225k. Combined with what we're willing to take out of cash flow, we saved enough for our kids to go to a state school or a private school with merit aid (so max of about $50K/year). Yeah we could've gone 20 years without vacationing or not updated our 80s kitchen or driven 2002 Honda Accords, and then we could've afforded to send our kid to any private school they wanted, but...meh. We (collective "we") put waaaay too much emphasis on "the dream school" and "THE IVIES!!!!!11!!!" as if they're somehow going to drastically alter the trajectory of your kid's life or provide some sort of incomparable experience that could never possibly offered elsewhere and I just SMH. Especially when we know that outcomes-wise, that extra ~100K is very unlikely to ever "pay off." I have no desire to deprive ourselves for 20+ years.

Nice excuses, Mom, but schools do matter for our kids and their futures. But enjoy your kitchen!

The stats don't bear this out.

[Anonymous]

Anonymous wrote:The idea of being "punished" for saving is somewhat overblown: every 100k of savings outside of retirement accounts adds 5k to your expected family contribution to college. HHI and number of kids in college at a time are the primary determinants of EFC.

5k per year.

[Anonymous]

Not everyone's circumstances are the same. Some who didn't save or save enough might unfortunately have had to deal with unforeseen life events and expenses, e.g., medical costs, eldercare, job loss. I'm sure many people just didn't plan well, but it's unlikely anyone has access to someone else's tax returns and bank accounts. Try to refrain from judgment and have some compassion.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The idea of being "punished" for saving is somewhat overblown: every 100k of savings outside of retirement accounts adds 5k to your expected family contribution to college. HHI and number of kids in college at a time are the primary determinants of EFC.

5k per year.

Not sure of your point as that was not unclear to me since EFC is annual.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We make about $225k. Combined with what we're willing to take out of cash flow, we saved enough for our kids to go to a state school or a private school with merit aid (so max of about $50K/year). Yeah we could've gone 20 years without vacationing or not updated our 80s kitchen or driven 2002 Honda Accords, and then we could've afforded to send our kid to any private school they wanted, but...meh. We (collective "we") put waaaay too much emphasis on "the dream school" and "THE IVIES!!!!!11!!!" as if they're somehow going to drastically alter the trajectory of your kid's life or provide some sort of incomparable experience that could never possibly offered elsewhere and I just SMH. Especially when we know that outcomes-wise, that extra ~100K is very unlikely to ever "pay off." I have no desire to deprive ourselves for 20+ years.

Nice excuses, Mom, but schools do matter for our kids and their futures. But enjoy your kitchen!

Oh trust me, I do!

[Anonymous]

Anonymous wrote:

Anonymous wrote:We make about $225k. Combined with what we're willing to take out of cash flow, we saved enough for our kids to go to a state school or a private school with merit aid (so max of about $50K/year). Yeah we could've gone 20 years without vacationing or not updated our 80s kitchen or driven 2002 Honda Accords, and then we could've afforded to send our kid to any private school they wanted, but...meh. We (collective "we") put waaaay too much emphasis on "the dream school" and "THE IVIES!!!!!11!!!" as if they're somehow going to drastically alter the trajectory of your kid's life or provide some sort of incomparable experience that could never possibly offered elsewhere and I just SMH. Especially when we know that outcomes-wise, that extra ~100K is very unlikely to ever "pay off." I have no desire to deprive ourselves for 20+ years.

Nice excuses, Mom, but schools do matter for our kids and their futures. But enjoy your kitchen!

Not really. If you're white from an UMC background it rarely matters whether you went to an Ivy or flagship, especially on the undergraduate level. There's been studies after studies showing this over and over again. The only time it possibly makes a difference to this group is if you're gunning for certain consulting or investment banking tracks. Otherwise in 90% of the cases, little Johnny will have the same outcome in life whether he went to Penn or Penn State. And, yes, as an Ivy graduate I can confirm this because I see it around me all the time. And I can also easily confirm plenty of kids go to Ivies and other top colleges and do not end up "successful" if we define it by household incomes. You'd be surprised at how many are now librarians or teachers or social workers or other roles where they absolutely did not need the Ivy degree and would end up in the same place had they gone to James Madison or Towson.

AAs benefit the most from a fancy college, followed by Hispanics. Asians and whites the least.

[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.

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.

Calm down dude. Read my post carefully. I said we could make it happen. We would be paying half out of savings and half out of income. And that puts us in a privileged minority and does suggest that my HHI is at a certain level to start with, which also puts us in a privileged minority. For that we are very thankful.

The real issue for me is the second part of your post. I don't think the Ivies are worth it at 74K, or the 90k it'll probably be when my eldest enters college. I could justify it at 50k a year. That would be expensive but still justifiable in my eyes. But at today's tuition levels, it's hard to see how it's justified. The opportunity cost of what I could do with the money, which I think less in terms for myself but for how I can help out my kids in other ways, is so great that it's almost mind-boggling.

[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.

When I was a SAHM, we lived within our means. We didn’t take fancy vacas and bought our cars in cash. I made the choice to SAHM, and don’t understand why my kids our penalized now that I work. Mind you I work two part time jobs because it’s not as easy as one thinks to get a FT job after choosing to SAH. But you think I should feel shame?! Why? I raised my kids and took a financial hit to do so. I will do so again so that my kids can get FA. Our country is messed up when SAHMs are penalized for working a few years before college.

I wouldn't count on FA just because you become a SAHM again. Many schools will likely impute income to you and factor that into any financial aid your DC may be entitled to receive. And I say this as someone who was a SAHM for about 10 years and struggled to get back into the workforce.

[Anonymous]

Anonymous wrote:Not everyone's circumstances are the same. Some who didn't save or save enough might unfortunately have had to deal with unforeseen life events and expenses, e.g., medical costs, eldercare, job loss. I'm sure many people just didn't plan well, but it's unlikely anyone has access to someone else's tax returns and bank accounts. Try to refrain from judgment and have some compassion.

+1

Despite starting to save for college before our children were born, we have not been able to save enough and our children will have/do have loans. DH lost his job during the recession and has never been able to earn more than 25% of what he used to earn. I had to take off about 7 years from my career because one of our children was diagnosed with a serious chronic illness and was in and out of the hospital all that time enduring multiple surgeries. We had our own loans from college and law school to pay back. We took in a relative and a friend of one of our kids for a couple years each when they had no had else to go. Saving for our retirement has been our first priority and college our second. We drive one 15 year old car with 300K+ miles and our kitchen and bathrooms are falling apart. No fancy vacations for us. Not exactly the lifestyle I thought I'd have being an attorney and having a spouse as one as well but that's okay. Good for those of you for whom life has gone according to plan and you've not dealt with any serious crisis that effects your ability to save enough for retirement and four years of college for each of your kids. Count yourself lucky but don't judge those whose circumstances you don't know.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not everyone's circumstances are the same. Some who didn't save or save enough might unfortunately have had to deal with unforeseen life events and expenses, e.g., medical costs, eldercare, job loss. I'm sure many people just didn't plan well, but it's unlikely anyone has access to someone else's tax returns and bank accounts. Try to refrain from judgment and have some compassion.

+1

Despite starting to save for college before our children were born, we have not been able to save enough and our children will have/do have loans. DH lost his job during the recession and has never been able to earn more than 25% of what he used to earn. I had to take off about 7 years from my career because one of our children was diagnosed with a serious chronic illness and was in and out of the hospital all that time enduring multiple surgeries. We had our own loans from college and law school to pay back. We took in a relative and a friend of one of our kids for a couple years each when they had no had else to go. Saving for our retirement has been our first priority and college our second. We drive one 15 year old car with 300K+ miles and our kitchen and bathrooms are falling apart. No fancy vacations for us. Not exactly the lifestyle I thought I'd have being an attorney and having a spouse as one as well but that's okay. Good for those of you for whom life has gone according to plan and you've not dealt with any serious crisis that effects your ability to save enough for retirement and four years of college for each of your kids. Count yourself lucky but don't judge those whose circumstances you don't know.

Thank you for your post.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think there are two kinds of complaints that bother me the most.

First, the people who are financially comfortable who complain that it’s not “fair” that low income students get money. They don’t seem to understand how persistent a low income kid has to be to overcome all the obstacles between them and going to college. They seem to think their kids obstacles were the same.

Then there are the people who convince themselves that they aren’t well off, even though they replace their cars more regularly than most, go on vacations, and live in a spacious home. I think hey look at the wealthy people in the area and social media and feel “poor” and deserving of financial aid.

+1

and a third irritation I have are the people I know with hs students who exlaim in exasperation when considering tuition "omg, we are going to have two in college at the same time!" as if they had never thought of it before.
I just listen but am wondering how they can possibly be caught off guard by that fact and why it is only registering now? Perhaps they did poorly in basic math during their own college years

Not to mention that having two at the same time is the best chance of getting financial aid at higher income levels because your EFC doesn't increase! Spacing like we did 5 years apart is the dumbest (in terms of financial aid).

[Anonymous]

It's not that we don't have ANY savings, it's that it's hard to save enough for the full cost of a lot of colleges today when you live in a high cost area and live on 1 income for several years and go through some expensive life events and prioritize saving for retirement like financial planners advise. We have enough saved to pay for about 20k per year before digging into yearly income but that doesn't fully cover all college expenses in a lot of places (even some publics) and therefore we are researching and mindful of scholarships and merit aid. Given the inflated cost of college, why wouldn't we try to maximize aid?

[Anonymous]

briandfd wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We make about $225k. Combined with what we're willing to take out of cash flow, we saved enough for our kids to go to a state school or a private school with merit aid (so max of about $50K/year). Yeah we could've gone 20 years without vacationing or not updated our 80s kitchen or driven 2002 Honda Accords, and then we could've afforded to send our kid to any private school they wanted, but...meh. We (collective "we") put waaaay too much emphasis on "the dream school" and "THE IVIES!!!!!11!!!" as if they're somehow going to drastically alter the trajectory of your kid's life or provide some sort of incomparable experience that could never possibly offered elsewhere and I just SMH. Especially when we know that outcomes-wise, that extra ~100K is very unlikely to ever "pay off." I have no desire to deprive ourselves for 20+ years.

Nice excuses, Mom, but schools do matter for our kids and their futures. But enjoy your kitchen!

Oh trust me, I do!

this

This too. Unless your kid is a genius or well.connected, and you are already "rich," going to an Ivy or going to private school won't be a game changer. The only exception I've seen is with poor.students on scholarships and kids with different needs that aren't met in publics.

My parents regretted spending all that money to send me to private school and eventually so did I (didn't have much choice, I was 6.)

I turned out fine, but I would have anyway and we would have had a much happier life going on vacations and not having to share one bathroom for 5 people. You enjoy that kitchen pp!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm with you OP - but college costs $60-70k at a private school now, it was $40k when I graduated in 2007, I can't possibly save fast enough to keep up with the rate of increase right now (as I stare down something like $3700/month in day care costs next year on $7000/month net income) so I can understand people not having saved ENOUGH.

Honestly, this is when you have to do the math on how much you earn (net) per hour and think about having a parent stay home.

We've done it. The two will overlap in day care for 6-8 months, depending on how much parental leave we can wrangle. We are both specialized and it us each longer than that to find new jobs in our fields in our last job searches. Sometimes you have to think long term.