One of the financial concerns of every couple is saving for their kid’s college education. Some end up making excuses why they shouldn’t, among them:
- You cannot borrow for retirement, but you can borrow for college.
- It promotes responsibility– they’ll work harder academically.
- I don’t have much money left after expenses.
Should parents save for college? You’re going to hear a strong opinion from me.
Top excuses parents make
“You cannot borrow for retirement, but you can borrow for college.”
You should indeed prioritize your retirement; the kids can always borrow. But do you really want your kids to get into debt?? I don’t and I’ll do my darn best to help them pay for their education. Don’t be selfish.
Assuming that you’re debt-free (besides the house), you should contribute the bulk of your savings into your retirement account AND still make an effort to save some for college. I’m not saying that you should be responsible for 100% of the costs but at least make some effort.
Times are different, the cost of education is getting higher than ever. Your kids will need as much help from you as possible. You brought them into this world, so you bear some responsibility in making sure that they have a bright future.
“It promotes responsibility– they’ll work harder academically.”
Children learn from their parents. They are an extension of their parents by their words, thoughts, and actions. How then can not saving for college promote responsibility??
It might have the opposite effect— it can promote your irresponsibility.
Would they work harder academically if they’re paying for it themselves? Probably yes. Does this mean that they’ll perform better than when you’re paying for it? No.
By saving for college, you instill in them the responsibility to do the same for your grandchildren and the generations to come.
“I don’t have much money left after expenses.”
Not surprisingly, the people who make these excuses are the same people who overspend on things like cars, vacations, and mindless home renovations.
In most cases, all you need to do is to tighten your budget. There are countless ways you can save extra money:
driving a cheaper car, changing your own oil, shopping for cheaper insurance, avoiding junk food, brown-bagging your lunch, getting rid of the cable, buying food in bulk, taking advantage of coupons, avoiding overdraft fees, not paying ATM fees, not buying extended warranties, buying refurbish electronics, skipping the latest model, mowing your own lawn… whew!
Either that or get a second job.
You should and you should start before they’re born!
The problem is that parents start saving two or three years before their children go to college when the time is not on their side.
Just like your retirement savings, the earlier you start, the more time your investment will grow. This is especially true if the funds are invested in stocks.
In our case, we started a 529 account for each of our kids as soon my wife told me that she’s pregnant. As a result, we now have over $200,000 saved for our two children.
The results speak for themselves.