How much do you put away for child's college?

[DVCLiz]

No one is giving you parenting lessons, but just realize that if you mortgage yourself to the hilt and have no retirement savings by sending your daughter to college the only person your acutally hurting is YOUR DAUGHTER because she will now become your sole life long life support in your old age. I sure hope for your daughter's sake you have planned for yourself because if you didn't you merely become a lifelong dependent in their perfect years.

As someone who speaks from experience. My parents were "selfish" and didn't blow the mortgage and retirement fund on my college education. My last year of college my father went thru a major medical incident and was rendered disabled. He never worked another day in their life. If they had blown the house on my college bills I would be forever be supporting them. Instead, they have a secure retirements, I have long since paid off my school loans and everything is great. Remember you can finance school but you can't fund retirement. As always if you can easily fund both retirement and college ed for the kids than magical for you, but otherwise don't fund the kids only to be a burden on them after school. No one ever expects the worst to happen.

Again, thanks for the lecture but it may surprise you to know that you are not the only person in the world to have figured that out. I haven't posted any of my financial information on this thread or any other but I am confident that our choices were the right ones. No one has any college debt and my retirement is extremely secure.

 

[4luv2cdisney]

Sounds like your husband was a poor money manager. I took out loans for my degree and repaid them all myself. I am 35, have a 401K with $150,000, put $80,000 down on a condo two years ago, paid cash for a luxury car and still have $100,000 in the bank. Don't blame taking out student loans for poor planning. My parents helped me out with small expenses in college but tuition, books, room, board were all part of my loans.

Well, if you make somewhere around 500K ("mid 6 figures" per previous posts)this is less than 1 years salary for you. It doesn't sound like you have a family to support, so you may be splurging on more than a $400 mixer. We have more than a years salary put away and put just as big of a down payment on our house. We are both in our thirties and make way less than 500K. So, I'm not sure I'm ready to give you too big of a pat on the back just yet.

Personally, I plan on letting my kids try to come up with much of their college $ on their own, then help them pay off their loans (maybe even pay off their loans) when they are through. I would love to be able to do that for them.

ANd my response to the poll was OTHER. We put money away here and there, not on a regular monthly basis. Some years we've put away a lot, some years none.

Not everyone's priorities or goals are the same. I have no desire for a job that requires travel, even for a hefty income. I'd take the basket weaving job (or whatever you mentioned in a previous post) if it makes me smile, doesn't stress me out and has me home before the kids get off the bus. Good for you that you think your job is wonderful, but it doesn't sound wonderful to me. I want my kids to go to a college that will enable them to find the perfect job for them, even if it doesn't pay top dollar.

I don't entirely disagree with you on the idea that you don't have to go to the best school to get the best job. As a matter of fact, my DH went to a technical school (that we paid for in full before he graduated) and he makes as much or more than some of our friends with expensive degrees. I just realize that what's worked for us and made us happy, is not necessarily the same for someone else.

 

[prncess674]

We will just have to agree to disagree. I would never plan on a retirement strategy of "put the kids thru school and hope they get a good job and support Mom & Dad during retirement, since I will have exhausted all my financial resources " If that works for you then so be it!

 

[allison443]

We will just have to agree to disagree. I would never plan on a retirement strategy of "put the kids thru school and hope they get a good job and support Mom & Dad during retirement, since I will have exhausted all my financial resources " If that works for you then so be it!

I didn't see anybody express this viewpoint on this thread....did I miss it? You seem to think that in order for parents to pay for college they must mortgage their home and exhaust their financial resources. That is not the case.

 

[crisi]

If you graduate with low marks, you wouldn't even be interviewed with a Big4, so I have no idea what they pay.

Yes, that is why I said OUTSIDE the Big 4. Do you have a serious reading comprehension problem?

And I know what I was offered by three big 4 firms as a CPA eligible starting accountant with a 3.97 GPA from a state school (but a Six Sigma Blackbelt, certified PMP, with 20 years of IT, including audit and compliance) under me, and it wasn't $75k. Nor does the data. Do a Google search for "starting salary accountants" and see if you can support your assertion. I can not.

 

[crisi]

I didn't see anybody express this viewpoint on this thread....did I miss it? You seem to think that in order for parents to pay for college they must mortgage their home and exhaust their financial resources. That is not the case.

Certainly not when someone works in a Big 4 accounting firm and is pulling the kind of money she is insinuating she pulls.

We will pay for our kids college educations because, frankly, with our income, I think it would be a crime not to. They don't need to graduate with loans for any reason other than their parents' own selfishness. They won't qualify for any non-private loans, and private loans we are going to end up signing for anyway. My college was paid for by my parents (the first time around, I went through it once between 17-21, then decided to get an unused Accounting degree in my 30s - I thought I needed a career switch but in the midst of the degree, my job at work changed and I wasn't outsourced to India with a lot of my coworkers. Then the job offers I got did not have $75k salaries associated with them - in the $50ks) - and I didn't value my education any less.

 

[punkin]

Certainly not when someone works in a Big 4 accounting firm and is pulling the kind of money she is insinuating she pulls.

We will pay for our kids college educations because, frankly, with our income, I think it would be a crime not to. They don't need to graduate with loans for any reason other than their parents' own selfishness. They won't qualify for any non-private loans, and private loans we are going to end up signing for anyway. My college was paid for by my parents (the first time around, I went through it once between 17-21, then decided to get an unused Accounting degree in my 30s - I thought I needed a career switch but in the midst of the degree, my job at work changed and I wasn't outsourced to India with a lot of my coworkers. Then the job offers I got did not have $75k salaries associated with them - in the $50ks) - and I didn't value my education any less.

The value of an education is not always in the salary you are able to command on graduation. Sure, it's nice to make $500K (not that I would know ) but there is much intangible value in being an educated and well rounded person.

 

[bettymae1121]

Certainly not when someone works in a Big 4 accounting firm and is pulling the kind of money she is insinuating she pulls.

We will pay for our kids college educations because, frankly, with our income, I think it would be a crime not to. They don't need to graduate with loans for any reason other than their parents' own selfishness. They won't qualify for any non-private loans, and private loans we are going to end up signing for anyway. My college was paid for by my parents (the first time around, I went through it once between 17-21, then decided to get an unused Accounting degree in my 30s - I thought I needed a career switch but in the midst of the degree, my job at work changed and I wasn't outsourced to India with a lot of my coworkers. Then the job offers I got did not have $75k salaries associated with them - in the $50ks) - and I didn't value my education any less.

And this was the point I was trying to make a few pages ago. It's one thing if parents cannot contribute anything, or only a little bit, towards a child's higher education. You can't get blood from a turnip after all, and parents should always take care of their own retirement first.

But, IMO, when a family does have the means to signifigantly contribute without impacting their own financial future, I feel they should (as long as the child is deserving, of course). By graduating with little or no loans, a young person has a HUGE financial advantage. All the money that would have gone to loans can now be saved for weddings, houses, and their own early retirement fund. It means they can take that un-paid internship for a year, it means they can take that lower paying job that is exactly what they want, vs. a higher paying one that isn't as fulfilling.

Now that isn't to say a child shouldn't work and contribute financially to their education, but my feelings are a person's job while in school is to learn, and that is a lot harder to do when holding down a full time job. It's certainly possbile, people do it all the time, but I've always felt that when there is a choice in the matter, it doesn't make a lot of sense.

DH and I don't have student loans because we didn't go to college, but I can easily see the difference in our lives for not having that debt. All of my close friends went off to school and all had loans to one degree or another. Two have declared bankruptcy and another will just pay off her loans when her oldest strarts school. The fourth still has loans, but makes a good enough income that it's manageable to pay them off early. Meanwhile, DH and I bought a house with 20%, own both our vehicals, and have a good amount in retirement. When we have kids we'll have the spare cash to save for their post high school education. If we have the means to pay for most of their schooling after our own needs are met, then that's what we're going to do!

 

[goodeats]

When I hear mid six figures I think $150K not $500K, which I know doesn't make sense.

Not sure what the pp meant, but I can't imagine a 35 year old making $500K unless they are a partner.

 

[RadioFanatic]

Wow, I didn't expect so many responses. My family is interesting because on my side, my parents paid for my entire college education, including law school. Did it make me think life was easy and to take it for granted? No. In fact, it did the opposite. Because of the way my parents brought me up and teaching me the value of a dollar, I actually did all I could do to contribute to my college education so that they didn't have to pay as much - I worked hard for scholarships - so much so that my four years of college were free; and then did a work scholarship in law school so that for my third year, I contributed $10,000 towards that year. In response, in my third year of college, my parents bought me a car which they never would have done if they were totally paying for college.

On the other hand, my dh's family did not save for his college and could not contribute in any way. So, my dh had to take out loans for everything which we are still paying. In fact, because our repayments are so high, we had to wait until later in life to buy a house because I refused to do so until we could (a) pay 20 percent; and (b) still have what I considered a sufficient amount in savings afterwards. It took us awhile to do that because the housing market is expensive where I live and repaying the school loans each month was what we jokingly called our monthly mortgage payment.

We will still be paying the loans for awhile but we also contribute to my 401K which is well on its way, my dh's job has a pension and we still put in $200 a month for my DS's 529 because we don't want him to be in the same position my dh was put in. We will, however, expect him to do everything he can to contribute to college by scholarships (if he is able - he's 2 so although I think he's brilliant, you never know how he will be educationally speaking) and summer and break jobs like I did. We will not be buying him a car as his education is more important (unless we don't have to fund college then we would). He also will be expected to maintain at least a B average in school for us to continue contributing. Like others, I'm not paying for him to party.

 

[tiredsigh]

Just to avoid any confusion: school loans are not eligible for discharge in a bankruptcy. So these people are declaring bankruptcy and still typically stuck with the loans.

I am tickled by the big name school versus the state school. An Ivy League education does jump off a resume when it is being reviewed. No one said that you can't go to a state school and still network. The name is often the first thing a company sees on a resume.

I went to a state law school and don't practice. I do use my law degree and wouldn't have my job without it. I do work better hours than any associates I went to school with. Don't regret the degree one bit. If I could do it over, I probably would have gone to med school instead, but I work in the medical field anyway in a legal capacity. So, I'm happy

As stated in my earlier post, we won't saddle our kids with the loan debt that I have. My parents could have paid for it. They just said I had to go to college and I had to pay for it.

 

[Took]

My loans were paid off in six years. Another thing to consider is what you are getting a degree in. While it is noble to want to study such things as basket weaving and English literature these degrees do nothing towards advancing your prospects for a good paying job in the future. My parents helped with filling out all the load paperwork but we had a very grave discussion about these loans are mine and every year that I wandered in school "finding myself" was costing me money. Each time a loan document came we added it to the running total so that I was VERY aware how much college was costing me. College students are adults, I don't understand why parents think of them as little kids running off to kindergarten. If your child can't understand student loans then maybe they need to work a low paying job or join the military and gain a little maturity.

While I agree with you in some ways, I disagree that English is the wrong major for futre money makers. I have read that about 40% of law school applicants are English majors. Most professional writers and editors are English majors (although some courses in technical writing would help), and as an English professor myself, I can testify that while the job doesn't pay a lot, the hours are pretty good and the work interesting. Furthermore, it's a very steady job--I'm not worried (much) even in the current economy. Community colleges are experiecing high growth in enrollments.

That said, I do agree with you that students should be very aware of the costs of college, whether they pay themselves or not. I only paid for my books and a few expenses while I was in college (scholarships, parents paid), but I always knew that it was a sacrifice and that I needed to do well.

I think parents need to consider both their children's temperments and their own financial situation when planning for college. Some students will step up to the plate and succeed while paying for their own college expenses; many others will not be able to do this and will simply drop out. Certainly, a young person who doesn't know what else to do and has no real goals should (probably) not be afforded a college education at parental expense. But some students who are ambitious and focused do much better if finances aren't a worry.

 

[Alexander]

Well considering both of my kids are in private school to a tune of $4,000 per year per kid, and my older DS will be in 7th grade next year to a tune of $8,000 per year, we don't save anything for college.

 

[ajwomic]

What happens to 529 money if they get full scholarships?

We have a unique situation in that my dh works at a private college and my kids will get free tuition. (about $35,000) a year. We will have to pay room and board, but any scholarship money offsets room and board which is about $8000 a year. Our state offers a $6000 scholarship for a 3.0 average. So most likely college will be free. So if we put $$ into a 529 and don't need it, what will happen? Our financial counselor also said a better bet might be borrowing from the roth because the Roths are not counted against you in applying for financial aid but 529's are.
Alicia

 

[disykat]

When I went to school it was still within the realm of possibility to put yourself through school without loans or parental help. That won't be possible for my kids.

I do plan on paying - almost fully - for their college. (bachelors only - 4 years only unless there are extraordinary circumstances. My kids know this and they also know that is only if they are still my dependent) Of course I will expect them to contribute. I'll also be involved in their grades/decisions etc. until they are financially independent. I'll do it like my parents did - we sat down with my grades and I laid out a budget including how much money I had and what I would need and my parents gave me the money. We did this each semester. I then wrote the checks to the college. I know exactly what college cost and I contributed as much as I could.

We have never saved a specific amount each month for our kids, but rather put money in as we could. We have some minor investments for them as well as two years each in a pre-paid plan. Our mortage will being paid off and we'll be using that as well as my income since we've always lived off dh's.

 

[wlwilliams9]

We have a high yield savings account for both of our DDs that were started when they were born. We have $500 direct deposited into each account every 2 weeks when DH gets paid. The savings is for college, weddings, 1st cars/homes. My Dad also buys them $500 US savings bonds every bday & Christmas and when my Mom passed, she had a $10,000 life insurance policy that was in my oldest DDs name so that went to her savings too. We actually added half of that policy to youngest DDs account recently because my Mom would have had them both on the policy if DD#2 was born before Mom passed.

Hopefully we'll be covered!

 

[Anne34]

We put $250/each per month into a 529 plan for each of our three kids. We also put extra money into their accts when we have a little extra. Right now each has over $35,000. That will pay for about 1 1/2 years of college. My oldest is 16 and will be going in a year and a half. We plan on cutting back in other areas to pay for all of their educations in full. We do have fully funded retirement plans and more than a year's worth of cash in savings in case of emergency.

 

[Jeninindy]

I am sooo glad my parents also sat down with me at the beginning of my college career and talked about my future and how I planned on financing the lifestyle I planned to live. I did my research and realized that an accounting degree with a good GPA would open many doors. I joined school and church organizations and NETWORKED NETWORKED NETWORKED!

Glad you enjoy what you do.

I have a college sophomore that started out in Accounting and decided he absolutely hated it (although enjoyed it in high school).

While he would have done well financially with that degree, he would have been miserable for the rest of his life. Now he is a happy history major and is planning on being a teacher - he loves mentoring other students and has scholarships in that area that is currently paying his college tuition and books.

He will never be rich, but I pray that he finds happiness in his life.

 

[tiredsigh]

He will never be rich, but I pray that he finds happiness in his life.

We need all kinds of professions. Some make more money than others. If he is happy and able to pay his bills, I think he is a success.

I could make a lot more money as a practicing attorney. I didn't want to do that once I graduated. I may make less, but I do not have to work super long hours. I also like the field I am in. To each his or her own.

 

[SDSorority]

We don't have kids yet, but we'll start putting away some money in a savings account- probably $100ish a month. I paid off all of my college loans ($20K ) just recently (I've only been out of school since 2006...), and DH had NONE (his parents paid for the whoooollleeee thhhhiiiinnng OOP) (we came from very different family situations obviously...)