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college savings

April 6th, 2017 at 09:02 am

We just contributed our $2k to our kiddos college fund a bit late for 2016. We're still in flux trying to buy a house but decided to go ahead and do it. We're invested for both of them in VTI and that's it. I guess in about 10 years we'll consider moving them to something more conservative but I figure at 4 and 7 we're better off taking the risk since the goal is to not draw on it for anther 11 and 13-14 years.

So I hadn't realized but DK1 has $19,398 and DK2 has $12,778. It's pretty good I think. Continuing on this track we should definitely have $50k by the time they hit college each. Stretch goal? $100k which I hope by that point will cover 4 years at a state school which is our goal as parents to give to them as a gift.

Now doing taxes I see a lot of people saving nothing for retirement. Saving nothing for college. But stressing out about how will they pay for college. I hate to say it but I suggest they instead focus on maxing out a 401k and IRA before worrying about college. And inevitably the words come out "but I have to pay for college. How else will they go? They need to go."

I don't know what to say. Since most are white collar professionals I would have to say not going to is not an option and I understand. It's not an option for my DH. And truthfully these people make more than enough money that college shouldn't have been a problem. But neither should saving for retirement.

But instead they are in their 40s/50s and basically bupkis for retirement or college. I have to say something has to give. And using their free cash flow for $100k towards college seems like a bad idea.

I'm not sure how we change this as society? I mean the obvious is to educate people about saving for retirement earlier. Saving for college earlier. Have less debt.

But what about this feeling that we have to pay for college? That we owe our kids a college education? We have to help them? Are we obligated? Is there an income obligation? If you make over $100k then you should be helping your kids because you make enough that you should have been able to save for retirement and college?

I'm not at that stage but seeing this make me wonder. Yes DH and I are being responsible but we're being overall responsible like others on this site and saving for retirement and college is secondary. Right now as it stands I think we are pretty close to having enough in taxable accounts that we could fund college now. But we aren't quite ready to commit to "earmarking" and putting that much into a 529.

But are we supposed to? Should we feel obligated? That we do well enough that we can afford to save for retirement early so instead we should focus on college? That we should delay ER for fully funding college 100%? I always have said our goal is FIRE and looking at our numbers we are there.

But DH is not about to give up his new career anytime soon he loves it. I love working part-time. I can't see myself volunteering and I love getting out of the house. So right now it's not on our radar. We have a slower pace of life since I stay at home for the most part and are more relaxed than most of our contemporaries. So we can fund college more but are we obligated too?

4 Responses to “college savings”

  1. creditcardfree Says:

    I don't think anyone is obligated to pay for college.

  2. ironicone Says:

    My husband & I paid for college (AA for him, BS/MS for me) while working, going to school and raising our daughter. We managed through employee reimbursement, GI bill and lots of overtime to get through college without debt. Quite frankly, those years sucked. Minimal sleep, no social life & quick fix foods. I don't want my daughter to go through that so we make it a priority to save for her college and we expect to be able to pay for a large portion of her education. There will be limitations (degree, school choice & grades) and stipulations in order for us to pay. The hope is that by the time she graduates she will not owe any money. We still save at least 25-30k per year for retirement, so it's not one over the other. (It's not just what you make but what/how it is spent).
    The other thing we have on our side is that we are young parents and have time on our side post college years for additional retirement savings.
    There is not an easy answer but I think, as a parent, it's my responsibility to provide for my child and do what I can to set her up for future success. I had a rough childhood and do everything I can do to break the cycle of dysfunction I grew up with.

  3. rob62521 Says:

    I don't think you are obligated to pay for college, but if you can do so, or at least help, it would certainly help your kids. I don't know you or your kids, but I will tell you what happened with some people I knew. They were savers. They saved over $100K for their son and daughter to go to college...this was college int he 1980s. The daughter went to school, became a nurse, didn't even use half of it, and did very well. The son went through the half he was to get and the rest that was his sister's and never finished college. As far as I know, still is not employed and he is in his 50s. He felt like he could do whatever he wanted since he didn't have to work for the money. I think it depends on you kids and how they will treat the money.

    Another family had scrimped and saved and when the son was offered a chance for a scholarship said no thanks, he already had the money since his parents scrimped and saved. They were not happy since they made quite a few sacrifices for the son to go to college and have it totally paid for. Funny thing, now he has three kids and is hoping they all get scholarships.

  4. LuckyRobin Says:

    I don't think any parent is ever obligated to pay for college for their children. I think we've been sold a bill of goods about college, that kids must go fresh out of high school, even the ones who don't know what they want to do yet or are not good students or are far more suited for trade school. If a parent wants to pay for college or contribute that is fine, but they should never feel like they have to, especially when it requires taking out massive debt.

    I am still of the opinion that kids should work their way through college. I managed it even with bad health. I worked full time and did tutoring for the school on the side. I got a scholarship from my job. All of my money went to pay for school. My parents did help, but it was help. They let me live at home rent free and paid for my food and medical. They contributed about 30% to the costs of college, I paid 40%, and the scholarship picked up the rest. I also didn't go to an expensive school, but chose something local.

    I think it is important for kids to work for it if they want it. Too many kids are just handed things today, which is why they are out protesting instead of going to the classes Mommy and Daddy paid for with $150,000 worth of loans or all the money they scrimped and saved so their kids wouldn't have to struggle. Without the struggle, I don't think people realize the value, especially young people, and especially if they've never had to hold down a job.

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