Thursday, August 25, 2016

To College Save or Not

Thus far, I haven't saved any money for my kids' college education.  I have not because I don't want to save in a 529 plan and then my kids not go to college.  This is a real fear of mine.  Oh yeah, Y doesn't want to pay for college but I do.  He thinks that kids who are handed college don't try or focus as hard.  I paid my own way through college and graduated in 4 years.  I have no idea what I would have done if I would have had help or any parental pressure.

I have thought about starting a 529 plan for my kids.  If neither one goes to college, we would have to pay income tax on the gain which would not be a big deal because we would pay that on a regular investment.  We would also have to pay a 10% penalty.  This is the biggest risk.

Would you start saving for college if you were me?


  1. If you are scared they won't want to go then use another savings instrument to put the money but do keep this money separated from your other accounts.
    I too feel college shouldn't be handed to kids on a platter but, if you have the income to help them out it's your parental responsibility to do so.
    Who knows what college will cost in the future or if it will even resemble what it looks/costs like now or if traditional college as we know it will be needed. If your kids prefer some type of vocational training you still need to help fund that as it also is not cheap.
    We put what we thought was enough aside for each of our kids but the costs have risen so sharply since #1 started in 2008 we are having to funnel another $20K into #3 kid's account and he'll still be having to take out loans his senior year.
    What makes this bad is that this is a STATE SCHOOL and not a private institution and his degree will end up costing around $100K. A private school would have topped $200K at least! What young adult can afford even $100K for a degree with the starting salaries in most fields?
    If you can afford it, don't saddle your kids with massive student loan debt by making them carry the whole cost. Make them responsible for some of it so they have "skin in the game" but give them help.

    Once it comes time to dole it all out(or not)then you and Y can have "words". lolz

    1. I'll ditto this general philosophy, although our kids are much younger so the numbers are different. I worked three jobs in college, had a scholarship, and my parents helped out. It took all of that, and I still had some small loans to pay off when I graduated. I plan to have a similar strategy, but hope my kids only have to work a moderate amount in college. I barely had a college experience - working way too much to really enjoy or study as hard as I could have.

  2. Yes , if a parent can afford to help I believe they should. We also live in PA and my ds goes to a state school. It is $80,000 for four years not including books, travel, and all the dorm stuff he needed. Why a parent feel they shouldn't help when they can is beyond me. My son will need to take out loans for his last and any money he has made working during the summers will help.

  3. Our fist 2 sons went to a state college. Son3 is in his last year of a private institution . The cost difference is flabbergasting and there is no way he would ever be able to go there without our help. I guess only you can decide if you should start a college savings fund of some sort, but from our experience different kids in the same family do different things. I would save outside of the state plan if you have concerns about them going to a state school. It might be that they even opt for some technical or alternate education where they might need a little help with tuition. Life is bigger than college and it is not for everybody, but everyone needs to be able to earn a living, and for most jobs that requires some kind of training.

  4. I would save for college if you are able. That was the plan my husband and I had for our 3 girls but it seemed like there was never extra money either because of layoffs, pay cuts, etc. We did try to live frugally otherwise and now have 180000 worth of college loans we pay on monthly. Not ideal but all 3 girls graduated and have high paying jobs, besides being awesome people. I would do it all again.

  5. We are saving for our kids education using the governments RESP program (Canada). We get some government funding up to a certain percent, but have similar issues if the kid doesn't go to school eventually with losing the grant money. We were able to open a family RESP though, so any of our eventual children can use it even if one or some choose not to go. It can also be used for trade school - really any post secondary education. We're not trying to save enough to pay for everything but we want to save enough to help our kids of a leg up. Some student loans are good, crippling loans are not so good.