I’ve been baffled by this phenomenon of sending kids to expensive colleges — I’m not kidding. Isn’t it possible to get a high-quality college education inexpensively?
Why are adults so willing to hock their right kidney in order to send their darling baby to the priciest school possible? Is it because they want their little pumpkins to have the best possible education? Is it because they want their wunderkind to hang out with Buffy and Chad for future connections? What is it?
Well, I finally figured it out. It hit me in a flash as I walked back from the mailbox a few years ago.
It has nothing to do with the student’s prospect for future success — although that’s the lie we tell ourselves. Studies prove that kids with equal ability have similar financial success in life regardless of where they go to college. Those same studies show that what they study is far more important than where.
Nope. One of the biggest reasons we send our kids to colleges that cost more than the first house we ever bought is because of our ego.
How do I know this?
Because when I went out to the mailbox that day I saw a letter from NYU. My middle daughter had just been accepted and the first thing I wanted to do was go to eBay and list my kidney (and right arm) to pay for it. At that instant, I was willing to do anything to send my own little pumpkin to NYU.
Those of you who know me realize how insane this is. For years, I’ve been critical of people who do what I was so willing to do in a flash. It’s like me telling people to track their spending and then getting into credit card debt.
Thankfully, I came to my senses quickly. When I really looked at my motivation in that instant, I saw that it had nothing to do with my child and everything to do with my ego. I am not saying there is anything wrong with NYU or other snooty expensive school.
But the decision should be based on two factors alone:
a. What is the overall best decision for the student?
b. What can the family afford?
We have to keep ego out of these kinds of decisions.
This topic is important. Even if you don’t have a child ready to go to college, observe how your ego trumps your intellect on other important financial decisions if you don’t stay on top of it.
Was your ego involved the last time you bought a car? A house? A meal in a restaurant? How much does your ego cost you on a daily basis?
Marketing is all about ego, so stay awake. If there was ever a time to keep your ego out of financial decisions, this is it.
Did you go to a pricey school? Was it worth it? Why?
Roger@The Chicago Financial Planner says
May 7, 2014 at 6:31 PMMy oldest went to USC over NYU in part because USC gave her about 3X as much money, turned out to be a great choice though NYU was one of the coolest campuses we toured and a great school kudos to your daughter. Our second one graduated from Northwestern and is now at Vanderbilt Law School (grad school is on her). The value of USC and Northwestern is in large part the networking. Both girls (ages 25 and 23) have already experienced the benefits of the networking and alumni networks of both schools, my oldest via picking up some freelance work in LA and my younger daughter landed a summer internship at the British Consulate via her Northwestern contacts. I suspect both will benefit over their working lives many times over from the school connections and alumni networks. The key for us was not paying the “sticker price” in either case. I completely disagree about the ego thing, at least in the case of our family.
Neal Frankle, CFP ® says
May 8, 2014 at 10:49 PMRoger,
Thanks. You have a lot to be proud of! Congratulations!
While it looks like the networking has really paid off so far, the overall experience is very different. If you get a chance to read the studies I’ve cited in this post and others, you’ll see that salaries 5 years down the road are rarely higher for grads of pricier schools. Of course there will be cases where this doesn’t apply. But overall, it’s not worth it in my opinion and I do think, with all due respect, that many people do make the decision based on bragging rights – at least to some degree.
Pam McCormick says
January 13, 2010 at 7:53 AMActually I am on the other side of the fence looking back AKA daughter already done but here’s some info from the other side…The daughter now says 2 yrs at community college then 2 at a partnering college even a state school would have been fine and a whole lot cheaper.Here’s what we did 4yr undergrad at private school-I paid next masters at state school only school who had the program she wanted-I paid next she went to the University of Rochester on a 30% scholarship-she paid(yes 2nd masters) looking back we would have done some things differently, when you see it written for you to fund retirement before paying for college believe it!To pay for her education I worked 2 full time jobs(I’m a nurse)she worked while in school,my husband worked full time and overtime plus took on the domestic goddess role,she lived at home 1st 2 yrs to help conserve money.We did all the classic packed lunches/shared cars etc.A little ego is not bad if your brain still rules the money decisions.CONGRATS!I heard a quote along the way about “you should not be working harder than they are to earn the education”.It should be a family effort but in my opinion a team effort.
chuck wintner says
May 24, 2009 at 8:01 PMIt looks like my kids are going to grad school. How much did you get for that kidney on ebay?
chuck wintner
Brana west says
April 3, 2009 at 4:38 PMKudos to her! Send her!!!! I’m so happy for you 🙂
Nathan Mersereau says
March 19, 2009 at 5:50 PMThis article takes a completely different twist when you put the letter “L” in front of the word ego. Great article though !
Michele Mersereau says
March 19, 2009 at 5:47 PMSwing and a hit!!! Thanks for sharing this! I’m going to keep my ego out of my comments and not try to be clever:)
Shaun Connell says
March 19, 2009 at 6:44 AMHehehe, I don’t blame your initial reaction — NYU is awesome! Congrats on your daughter making it!
My parents made picking college easier on themselves by giving me the opportunity to pay for it all. 😉 I prefer it this way, so it’s all right — it just encourages me to always keep a job or two going. 🙂
Neal says
March 19, 2009 at 6:48 AMThanks Shaun. Sounds like your folks raised a very bright and self-motivated person. Well done!
Neal says
March 18, 2009 at 8:48 PMNice work Michelle. Good catch!
Michelle Feinberg says
March 18, 2009 at 3:10 PMToo funny and all too true! My youngest has been in jr college locally the past two years and has applied to several schools and of course not one locally! Yesterday she got a congratulations letter from FIT in NY. While she was excited, my first thought was what part of my body is still in the best shape to sell! While I was proud of her I couldn’t wait to share the news that she got in. EGO! Now to look at local schools…………….
Take care Neal.