Anyone will tell you that having children is expensive. Food, clothing, housing, soccer lessons, it all adds up but the biggest financial worry is college; given today's prices, if my four children were to get four-year degrees at private universities it would cost approximately $380,000 and the price is only going up. By the time they actually get to college I expect it could be well on the way to half a million dollars.
Someone recently asked us how we are planning on paying for our children's educations and the answer might surprise you. We aren't. At least not in the way most parents are planning.
One of the biggest financial mistakes parents make, besides carrying enormous consumer debt, is paying for their children's university educations. If the numbers I've quoted above don't convince you then I'm not sure anything else I can say will do the trick but here's a few things to think about:
1. You can't afford it. Unless you're making an income greater than 99% of the rest of us you can't afford to pay for college. It will eat up your retirement savings, it will put you in debt, it will cripple you financially. And it's not just me saying this--even popular financial gurus like Suze Orman have been saying this for years. Anyone out there have half a million dollars just lying around? I thought not, neither do we.
2. It's not your job. Being a good parent doesn't mean paying for your child's education. Your job is to provide food, shelter, clothing, medical care and most of all lots of love and teaching--but not a B.A. My job is to teach and guide my children but it's not my job to follow behind them with a checkbook, paying their way through the halls of higher learning any more than it's my job to buy them their first home or pay for the births of their children. Is anyone expecting their children to pay for their retirement? No, we're planning for our own future because some things people have to do for themselves.
3. It can be done without your help. Despite what others might have you believe, government grants and programs, scholarships, plain old fashioned jobs, even military service make a degree quite accessible barring extraordinary circumstances. It can be done without mommy and daddy getting a second mortgage and footing the bill--it might mean your child has to get a second job, it might mean they don't get straight As, it might mean they scrimp and save and struggle but are you so sure that those are bad things?
4. It's better for them. Children are better served when their parents expect them to pay for their own education. This may go against conventional wisdom but if a child--actually I should say an adult, they're 18 years old, right?--is encouraged from a young age to learn skills and get employment that will provide them a way to get through college, whether it's delivering pizzas, answering phones or mowing lawns, then not only have they learned how to hold a job but it'll be easier for them to get a job in college and after college. It will also provide motivation for them to get through as fast as they can when every semester they're having to pay that tuition fee.
So what do you do? If you decide that you want your children to pay for their own education what can you do to help them? Because though the way may be cheaper it certainly won't be easier--they're still going to need help which means lots of work to teach them a few things.
Teach Them to Think Cheap
The first mistake people make when thinking about college is to consider private universities for undergraduate degrees. The average price of a private university for 2007-2008 is $23,712 which is completely outrageous.
However, 56% of students last year chose to attend colleges costing $9000 or less in tuition. If you're shopping for a car you look for a good deal, if you're shopping for a home, a shirt, a loaf of bread you always look for a good deal but why is it when education is on the table that suddenly people are willing to plop down a tuition check nearly as much as an annual U.S. wage? And that doesn't count living expenses or books. Here in Anchorage UAA offered the top 10% of graduating seniors full scholarships when I was looking at colleges--you can't beat a deal like that. When Andrew and I were applying to law school our biggest criteria was cost. We were determined that we were going to do it as inexpensively as possible and every day since then we've been thanking our lucky stars. Besides, "inexpensive" doesn't necessarily mean "cheap" when it comes to education.
So teach your children to enjoy saving money and not to always need the most expensive brand which translates into going to a state-sponsored school for their undergraduate. Go cheap for undergrad, do well and prove it with good grades then save your money for graduate work if you've got to have that ivy league stamp on their transcript. The hard truth is that very few employers care where you went to school anyway, they care about your grades and work experience but not whether you went to a private school. If you want to be a celebrity in your field then by all means buy the fancy brand name school but most of us don't require that to be successful.
Teach Them How to Get Help
As I said before, education really isn't beyond the grasp of most people--my husband put himself through school with the help of Pell grants, scholarships and manageable student loans (not counting the costs of having a wife and two children at home) and for most people this is a realistic plan. There are lots of services to help students apply for financial aid--it may take them distancing themselves from their parents as dependents so as not to be jeopardized by their parents' income for qualifying assistance but it can be done. Learning to navigate the system and understand financial services and interest can be as important a life lesson as the things they'll learn in the classroom.
Teach Them To Work
The best I saved for last because teaching your children to work for something they need and want is one of the greatest gifts you could give, it's much more valuable than a tuition check. Paying for college certainly isn't easy but difficult things are usually worth the price of accomplishment and the work will make them appreciate their education all the more. It will also make them take their studies more seriously--languishing through six years of school (that's the average time it takes for a four-year degree nowadays) with no idea of what to do in life is a lot harder to do when you're paying for it.
Tell them your expectations when they're young then teach them how to make a resume, how to go through a job interview and how to hold a job. Teach them not to turn their noses up at honest work or to think a job is beneath them and teach them to learn how to face multiple pressures at once by expecting them to work while going to high school--studies show students who work part-time while attending school full time have better time-management skills and get better grades overall anyway. In short, a lot of work never hurt anyone and it'll get them through school.
The whole point of parenthood is to raise another human being to be good, caring, productive and independent and children will never learn to be independent so long as they're still counting on Mom and Dad to foot the bill. You don't have to cut them off completely--be that safety net should the unexpected traumas of life rear their ugly head (that's part of what family is for--and we do have a small emergency savings for that kind of thing) but first give them the chance to act and grow for themselves by teaching them to work toward their own financial and educational goals.
They'll get a far higher rate of return on their educational investment with their own money than they ever could with yours.
Congratulations to Paula who won the Seattle TourSaver giveaway--tomorrow I'll announce the winner of the DK and Barefoot Books package. I'll have more books to give away tomorrow . . .
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