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To save for college or not to save for college?…That is the proverbial question. You’re going to hate me for saying this, but there isn’t a one-size fits all answer. What works for your family, may not work for others.
How much do you want to pay?
As a former financial advisor, I worked with folks from all walks of life. Some wanted to fully pay for their kids’ education, others wanted to contribute what they could, and some people did not want to pay a cent. Who’s right? They all are!
There are a few questions you need to answer. How many kids do you have (you should probably know this offhand) and what do you honestly think they’ll do after high school? There’s a massive price tag difference between public and private universities, in-state and out of state tuitions. My advice is to speak with your partner, spouse, co-parent and decide on a percentage of either public or private school you’d like to cover and then adjust for inflation.
For example, I have a 2 year old and 6 month old. College isn’t exactly on the doorstep for us at the moment. I’d love to be able to cover 50% of the cost for both kids at a private school. So how much do I need to save?
I looked my alma mater’s current price tag (plus housing, books, etc.) and inflated by 3% for the next 16 years for one kid and 18 years for the other. Then I calculated what 50% of that would look like in future dollars. Then I threw up in a diaper bin and decided instead of college they will join the circus.
What can you realistically do?
The next question I need to ask myself is what can I realistically pay for? Is it actually 50%? This question requires brutal honesty and introspection. We want to give our children the world, but at what cost? If its going to cost you your retirement, you can’t afford it. Here’s the simple truth: you can subsidize college, but you cannot subsidize your retirement and financial needs in old age. In other words, student loans aren’t great, but they aren’t the end of the world. Personally, I’d rather have student loans early in adulthood than parents who become financial burdens late in life because they stopped saving for retirement to pay for my school. Not everyone will agree with me, but that’s a personal choice.
Let’s talk about your kids and their goals.
Parents have visions of what their kids could be. Do I want my daughters to cure diseases and invent the next great technology? Sure. Will I love them the same if they decide to work a regular 9-5? Definitely. Harvard and Yale are great, but less than 1% of college students attend an Ivy League school. There’s dignity in all work, unless you play for the New York Giants. There is no dignity in playing for the Giants.
Don’t poo-poo all the options here either. Public universities, community college, trade schools, apprenticeships, entrepreneurship are all viable options in this day and age. Talk to your kids and guide them toward an option where they can be fulfilled and make a living.
I want my kids to make a nice income for themselves, but ultimately, I want them to find what they’re good at. I want my kids to find joy, purpose, and/or meaning in their work…something the folks on the New York Giants may never know.
(I’m sorry, but I’m a different person during football season!! I have to talk trash.)
Save yourself first, then do what you can for your kids
We touched on this earlier, but parents, please please please save for yourself first. Your talented child cannot be your retirement plan. Please don’t do that to your kids. Once you’ve established a solid savings and investment plan for yourself, go ahead and open an up a 529 plan for your kids’ education.
How expensive is higher education now? Let’s take a look:
Type of Education | Typical Duration / Program Length* | Typical Annual Costs (Tuition + Fees) | Other Costs (Room & Board, Books, etc.) | Estimated Total Cost Over Full Program |
|---|---|---|---|---|
Private, Nonprofit 4-year college | 4 years (bachelor’s) | ~$43,350/year (tuition + fees) (Credible) | ~$15,250 room & board + ~$1,290 books & supplies + ~$1,150 transport (Credible) | ~$244,000 total (tuition + all expenses) (Credible) |
Public 4-year — In-state | 4 years | ~$11,610/year (tuition + fees) (Credible) | ~$13,310 room & board + ~$1,290 books & supplies + ~$1,340 transport (Credible) | ~$120,000 total (tuition + all expenses) (Credible) |
Public 4-year — Out-of-state | 4 years | ~$30,780/year (tuition + fees) (Credible) | Similar non-tuition costs to in-state | ~$123,000 just tuition; with living maybe ~$200–220k |
Public 2-year / Community college | 2 years (associate) | ~$3,598/year (in-district) (Education Data Initiative) | Add living, books, etc. | ~ $10,000–25,000 total depending on location/living costs |
Trade / Vocational / Certificate programs | Varies (months to 2 years) | ~$12,000–$20,000/year common (SoFi) | Room, supplies, tools, etc. | ~$15,000–$30,000 total in many cases (CollegeTuitionCompare) |
Other options (online, adult education, apprenticeships, non-degree credentials) | Varies | Often much lower (some only a few thousand or subsidized) | Lower or negligible housing costs if remote | Depends — many are under $10,000 total |
Gif by nbcmakingit on Giphy
There’s no “right” amount to save for college or higher ed. It depends on what you want to do and what you can do. The earlier you start planning, the easier it’ll be.
Hey! Did I mention I wrote an off-Broadway show? Did you get your tickets yet?! Vape! The Grease Parody opens in November and I’d love to see you there! Tickets are available at vapethemusical.com.
Until next week, friends!
-Catie