So, my wife and I have been giving a lot of thought to having children soon, and to be perfectly honest the thought alone scares the hell out of me. Not because I don’t like children, I do, but at 33 years old I still feel like I have a lot I want to see and do. All that aside, I’m fighting a losing a battle and it will probably happen sooner rather than later. Queue up the next related discussion…money! Children cost money, neither my wife or I are ignorant to this, but she doesn’t think they cost as much as I do. Forget about diapers, formula, toys, and all that other jazz. Saving for college has become a very real cost to raising children, and if it’s not, then it certainly should be.
My parents didn’t have a lot of money, and neither of them attended college, but they had always promised that if I went for my degree they would find a way to pay for it. My wife’s family has a bit more money, but also a few more kids, yet they still paid for each and every one’s college education. We couldn’t be more grateful, today we are debt free with the exception of a mortgage payment, and we owe a great deal of that to our families. After all, it’s not like I can start saving the necessary money and investing it at age zero! I read an article recently that said for any children born right now, the parents would need to save about $400 per month to pay for a 4 year degree at an average college by the time they turn 18 years of age. This is where the disagreement between my wife and I come into play.
I try to remind her that it is our moral and fiscal responsibility to save that money for our children, since they are unable to save and invest as newborn and children. We know better and have the means, they are clueless infants without disposable income! Ok ok, so we don’t have much disposable income either, but you see my point! My wife is in the camp that we save what we can, when we can, and they have the option of student loans and scholarships when it comes time. I like to remind her that’s not exactly how it worked for us, and while I did receive a small amount of scholarship money my parents would have paid the remainder no matter what…as would hers. It’s nice to sweep the issue under the rug and just worry about it when it comes time, but that’s the root of all financial troubles….procrastination! This is why people pay their bills late, ruin their credit, delay (or never enjoy) their retirement, etc. Financial planning is the cornerstone of being fiscally healthy. My wife isn’t a spendthrift by any means, she just likes to procrastinate when it comes to serious matters, and the little devil on my shoulder wants to listen to her.
Once they reach that age, we can also put some responsibility on our children to look for other ways to pay for college. For example, they can apply for federal and state scholarships and grants, which will help ease some of the financial burden. In most cases, the student simply has to fill out a FAFSA form, which is used to determine his or her need for assistance. External scholarships are also available, as millions of dollars are handed out to deserving students each year. Universities keep this scholarship information on their websites, in addition to information about federal grants and loans, making it easy to apply for this money. There are so many sites like Textbookrush, Chegg, Valore Books and Bookrenter that allow you to rent or buy textbook at huge discount. You can also sell your used book for great price.
Remember all of those statistics you used to see about the troubling amount of credit card debt per household? Turns out that is still an issue, but only a fraction of the $1.2 trillion of student loan debt this nation is facing. I have a friend who is a social worker with a PhD, $200,000 in student loan debt, and makes roughly $60,000 a year. She will be facing debt repayment for most , if not all of, her life. For the $160,000 it is going to take to put each of our imaginary children through college, we will be a lot better off saving incrementally now rather than cleaning out our measly retirement accounts when the tuition is due. That is unless you agree with my wife’s theory that our pretend children could take out loans and fend for themselves. But I ask you, based on the reasons above, whose responsibility do you think it is to pay for college???