One decision you and your children will make is whether or not they’ll go to college and if so, where. This is probably one of the most important decisions you will ever make but not for the reasons most people think.
Studies prove that in most cases, the specific college kids attend has little impact on their success later on in life. What is far more important of course is the major they select. Once a good decision is made in that department, their success in life will be a function of who they are rather than where they went to school.
So why is picking the right college important? Because, if you want to set the kids and yourself up for the good life, start by sending them to a college everyone can afford. Do you really want to deplete your life savings or saddle them (or yourself) with debt for the next several decades? Please don’t. It’s not a good investment and only pays for itself in unique and rare occasions. Anyway, frugal college spending is cool these days. Don’t be square Pilgrim! Save instead.
This is not only a great way to keep your financial future on solid ground. It also sends a very important signal to the youngsters; that they should live within their means. Looked at another way, why do you think so many kids have problems with credit card debt? Maybe it’s because their parents modeled reckless spending behavior by buying a college education that was well beyond their means. You can’t teach something you don’t live Pilgrim. If you want your kids to be financially responsible, show them how it’s done by sending them to a school you can pay for.
If finances are tight, send them to Community College first and have them transfer after they finish the second year. This way, you’ll save a fortune and they’ll still get their degree from a four-year school. This move also slashes the price tag because it allows them to live at home and work part-time.
As soon as possible, start talking about this. Your children are going to face a lot of peer pressure about which school they will attend. Parents often send their kids to outlandishly expensive colleges for no real good reason. They’ll never admit they do this for bragging rights but that’s what it’s mostly about. This is really easy to prove and I’ll tell you how.
The next time somebody tells you where their kid is going to school and they tell you how expensive but great it is, ask them why it’s so great. I tried this on my neighbor and it really quieted her down fast. People say that this or that school is great…..but they can’t say why. Well…..if I’m going to sell my left kidney so I’ll have the cash to send my kid to “a great school” I want to know what makes it so great before going under the knife.
Going to college is both an experience and an important way to prepare for the future. The “experience” is going to happen regardless of which school you choose. And believe it or not, I think your kid can potentially have a much more rewarding experience at a lower-priced college. At the very least, I know it’s possible by first-hand experience.
And when it comes to preparing for the future, remember that your kid is going to have to face that future on their own. College lasts 4 or 5 years. But the consequences of the decisions they make around that can last decades. If they study something that helps them find meaningful work and they get that degree without mortgaging their future, the years ahead will be bright. But make sure they think about what happens after college. Do they really want to be responsible to pay off student loans for the next 10 or 20 years? Is their academic pursuit something that will help or hinder them from having a full life?
These are questions that are very specific to the individual. But many families don’t take the time to really explore. Somehow, many people in our culture have swallowed the lie that just because our kids are accepted to a college, we have the obligation to pay – whatever the cost. This is a corrosive idea which can destroy not only your finances but your children’s as well.
Neal Frankle says
Thanks for your thoughtful comment. I agree with your thoughts about college funding.
I would also say that the stock market is certainly gambling for those who speculate and demand short-term results. For people investing for 10 years or more the market has been a great way to invest.
I wish you every success in college.
Trey Baird says
I liked Suze Orman’s advice that money you intend to spend in the next 4 years has no place in the stock market. When your child enters high school, take their college money OUT of the stock market.
Personally, I consider the stock market to be glorified gambling. And when you gamble, you will lose from time to time.
As for your suggestions, I pretty much completely agree. Student loads should be avoided if at all possible. I haven’t attented college yet. My debt is bad enough without having the additional burden of having to pay off student loan debt. Thank the Maker.