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6 Reasons Not to Save for Kid's College

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Taosman

Taosman

Your Cousin In New Mexxico
6 reasons not to save for kids' college

No, it won't make you bad parents. It's fiscally irresponsible to spend your retirement money on your children's education.


By Sally Herigstad Andrew and Kara, of Portland, Ore., have heard about how much college will cost by the time their kids turn 18. Andrew is a technical writer; Kara stays home with their two preschoolers. Some months they barely get by, but no matter how tough it gets, they always manage to put money in the kids' college funds, even though they can't afford to buy a house or contribute to Andrew's 401(k) plan.
Andrew says, "At least we know we're doing right by our kids."
Conventional wisdom tells us college is very, very expensive, and we'd better start saving if we want our kids to get an education and a good job. Private colleges currently cost over $25,000 per year, and even in-state public universities cost over $12,000 per year. Few people can fork over that kind of money without planning ahead.
But are we really in deep trouble if we don't have a college fund set up for our 5-year-old? How should we balance saving for college with other financial goals?

Sometimes, putting money into education funds can be a mistake -- or at least not the best use of your money. Here's why: You can't get a loan for retirement

Other financial goals come first. It's heresy to some, but it's true: Your retirement plans are more important than your children's college funds. Your kids can get through college somehow, and you will probably find a way to help them, but it's more important to plan for your retirement. Remember, your kids can get student loans, but there's no such thing as a retirement loan. link below...............
http://articles.moneycentral.msn.com/CollegeAndFamily/SavingForCollege/6ReasonsNotToSaveForKids.aspx
 
Dryden's 3 reasons not to save money for kids' college education:

1. Get better grades.
2. Get a job.
3. Get a loan.

My old man tried saving money for my college education, then realized when he'd got to about $4K he wasn't even going to make a dent, so said 'screw it' and used the money he'd saved up to that point to buy a boat. :shake:
 
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two words: state school

If my kids want to go to a private college they can pay for it. My fiance and her parents paid $20k+ for her to go to a private college and play basketball for a 2 grand scholarship. Hell go to one of the 10K a year state schools and walk on the bball team, it's cheaper. I'm really hoping than any sons that I have will be the third generation that get a free ride for college. My parents didn't have a college fund for me although they now call their lake house my college fund. :p
 
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Just some old fart musings: When I entered OSU tuition, ROOM & BOARD for a year came to about $1000. I recall my parents writing checks for something like $350 per quarter. That put me in a luxury box on the 11th floor of Park Hall with two other guys. The john was just down the hall, the maid swept our floor and made our beds five days a week. We had three meals a day (except Sunday when we had to get dinner on our own) and for institutional food it was OK. All the milk you could drink and fresh fruit was always there for the picking.

I could come home to Dayton in the summer and get a job in a GM plant and make enough money to pay for everything, plus my fun money in 8 weeks and still have a two week vacation before school started again.

By the time I left tuition had zoomed to something like $750 a quarter.

By 1988 when my daughter left for Ohio U. state university costs had risen to about $7K per year. That far outstrips the inflation rate of any other commodity including home ownership... and for what? My daughters dorm room at OU was possibly smaller than my Park Hall abode, there was no maid service and the food service was now outsourced and awful.

There is, unfortunately for me, no concurrent rise in the pay I make as a university adjunct professor that matches the rise in the cost of going to school. i.e. the incresed fees are not the result of increased cost of teachers. So though college costs have risen well beyond the pace of inflation, college teacher's salaries have not.

Where is the money going? I don't know. I can tell you one thing, there is an unholy alliance between universities, contractors and the trade unions. All three groups lobby the state for money and cover both sides of the aisle. You want proof? University of Cincinnati is about to tear down Shoemaker Hall, a 15 year old, once state of the art, basketball emporium to build a new one. Walk on any campus and look at all the construction going on.... not 60's era "we need more classrooms" construction to take schools from pre-boomer size to their current size... but God knows what construction (and it ain't teacher's offices either).

Look at OSU. In the 1940s the school was still something on the size of 10,000 undergrads served in buildings that surrounded the Oval. By 1960 it had grown to 40,000 undergrads, yet the amount of classroom space remained about the same (everything around the Oval). They have done nothing but build since then yet the size of the school in terms of undergrads remains about the same as it did in 1960 and the classrooms are the same set of buildings that surround the Oval.

Conclusion: There's a shit pot full of tax payer money being poured into colleges and yet the cost of school keeps outpacing inflation. Something is seriously fishy.
 
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Dryden;797130; said:
Dryden's 3 reasons not to save money for kids' college education:

1. Get better grades.
2. Get a job.
3. Get a loan.

My old man tried saving money for my college education, then realized when he'd got to about $4K he wasn't even going to make a dent, so said 'screw it' and used the money he'd saved up to that point to buy a boat. :shake:
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I just told mine that if they wanted to go to college they would have to work their way through. Then helped as I could.
I just skipped the "try" part and saved for a boat. I never got enough for that either.:tongue2:

To your list I would add; Make them appreciate the experience more.
 
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Best Buckeye;797495; said:
I just told mine that if they wanted to go to college they would have to work their way through. Then helped as I could.
I just skipped the "try" part and saved for a boat. I never got enough for that either.:tongue2:
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Get the boat, that way when they drop out, have no degree and $20K in debt, you can at least take them water skiing to get their minds off of it.

Plus, there's a good life-metaphor in there somewhere with you throwing them a rope, them holding on to it as you gently pull them along, then you suddenly opening it up full throttle and flipping them head over heels, face first to a rude awakening until they beg you to stop.
 
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what really pisses me off is that now that they are well estbalished and making the big bucks. They are making loan payments instead of helping me buy the boat. :biggrin:
Hey ! I put a lot of time into blowing them off and teaching them all those lessons. The least they could do would be to show a little appreciation .:wink2:
 
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I put my two daughters through the University of Hawaii...one took 4 1/2 and the other 5 years to get their full degrees. I paid for half their tuition (my share was about $3,600 a year), for their dorm rooms (about $1,800 a year), and all their books (about $500 a year). Both of them had jobs for their spending money, and both stayed in the dorms for about two years before bailing back to their rooms at "dad's house". I still managed to buy a new house here while on active duty and a new Lexus right after I retired from the USAF. Helping pay for college didn't hurt all that bad, but it sure is nice not having to fork over $4,800-$5,200 a year per kid. I paid just over $46,000 to put my two kids through college, and this could've been a real nice chunk into my retirement chest (had I indeed saved it), but in the long run I think I feel better by not having my kids with student loans hanging over their heads...
 
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