We met with a financial advisor the other day to get our finances organized. Nothing fancy, but we wanted to make sure we had enough (and the right kind) of life insurance, were maximizing our savings and had a solid plan to save for our daughter’s college.
According to our financial advisor, a year at a private college is projected to cost almost $100,000 by the time our daughter turns 18, which is in 13 years. (I’ll just pause a bit here as we all stare at this INSANE number. My husband and I both went to the same liberal arts college, which seemed insanely expensive at $30,000 per year. Wow.)
This means that a four year private college education will cost nearly $400,000 for one child. (And this is on top of the $200,000+ that it costs to raise a child during his or her first 18 years of life.) The only question that comes to mind when I see this number is how in the world will most non-ultra-rich families be able to cover this? Of course there are scholarships and loans and work study jobs, all of which can reduce this number, but what remains will likely still be scary.
As we were going through our various numbers and goals, our financial advisor asked if it was important for us to save for our daughter’s college education. My husband and I both paused because it was an unexpected question — of course were want to save for her college education. It’s never entered our minds not to. I went to college just four years after my family immigrated here from the former Soviet Union and my parents cobbled together enough money to pay for what I couldn’t cover with loans, scholarships, work-study and working at Friendly’s in the summer. It was tremendously difficult for them and I am eternally grateful. I’ve always planned to do the same for our daughter (although I’m hoping it will be easier given that we’re starting to save early.)
We told the financial advisor that yes, of course, it’s one of our big financial goals. He then reminded us that we need to prioritize saving for our retirement above saving for our daughter’s college. “She can get scholarships and you and she can take out loans to pay for it, but there are no loans for retirement,” he told us. This mades sense, actually, but we’re still going to be putting aside quite a bit of money every month into our daughter’s 529 college fund. Helping her pay for college is one of our responsibilities as parents, in my opinion, but I’ve recently had conversations with several people who think about it differently. “If I can help my son, great, but it’s not something I want him to plan on,” an acquaintance recently told me.
Don’t get me wrong: I think it’s essential that our daughter carry some of the burden of paying for college on her own. Both my husband and I graduated with a lot of student loans, which helped each of us be much more focused and responsible with money, quickly. I think having a huge stake in my college education also helped me get a lot more out of it — I didn’t want to waste this very expensive experience, one that I was going to be paying for as well as my parents. But my husband and I want to be ready, financially, to cover a lot of our daughter’s college costs and we’re being diligent about saving for it, which is neither fun nor easy.
Do you plan to help your kids pay for college or do you think it’s their responsibility to figure it out? Is saving for college a core part of your monthly budget?