I have decided to look at a different approach to college planning. Most financial planners and personal finance books tell you to save for your kids college. I have assembled a few reasons that might make you think twice about helping them out. Feel free to comment at the end about your thoughts on the list or why you would want to pay for their college. Maybe the pros will outweigh these cons.
1. They Are More Likely to Go to Class
Being fully invested in their own college career will make them more likely to attend class. I know that it worked for me. I knew that if I didn’t attend class on any given day, I was flushing quite a few dollars down the drain. I also knew quite a few people that did not attend class because they were there on mommy and daddy’s dime.
2. They Are Investing in Their Future Career
Teach your kid to think of it as a long term investment. If they pay for their own college, their destiny is in their hands.
3. Help Them Learn to Be Frugal
I’m talking from experience here! If your kid has a hand in paying for all of their expenses, they are more likely to learn how to save money at various places. Ramen noodles come to my mind! Yum!
4. They Are More Likely to Finish Faster
When I first started graduate school, I planned out my entire class schedule before my first semester. My main goal was to finish as soon as humanly possible. I knew that if I stayed only one extra semester, there would be all kinds of addition costs like housing, food, travel, books, tuition, etc. I will be glad to graduate in December and start my career.
5. Parents Can Invest in Their Own Retirement for More Gains
This is a no brainer. If you are not saving for your kids college, you can use that money for other things. It could be home improvement, vacations, or adding to your retirement accounts. By placing the extra money in your retirement account, you can save less per month and have more when you retire. Just take a look at what the power of compound interest can do.
6.They Will Learn the Value of Money
Have you kids ever asked for something? If you have kids, the answer to that question is yes. What happened when you told them that they couldn’t have it? They cried bloody murder because they really had no idea what the value of money was. They figured that they could have whatever the wanted. Having them be responsible for their own costs will make them appreciate the value of money more.
7. It May Encourage Them to Do Better in High School
If your child knows that they will have to pay for college themselves, they may be more inclined to succeed in high school. This in turn may help them get scholarships to reduce the amount of tuition that they will have to pay.
8. Because College May Not Be for Them
This is true for many young adults. I have known several people that dropped out of college early in their career for something else. College just was not for them. Whether it was the classes or some other thing, they found a true passion somewhere other than college.
9. You will Pay No Fees if They Do Not Go to College
If you saved money in a 529 plan and they dropped out or received scholarships, etc, you would have to pay a 10% fee just to get the money out. That could be a huge chunk of change if you have been saving for awhile. You will also be taxed at your income tax rate for any of the gains.
10. They May Be Less Susceptible to Drugs and Alcohol
I have seen many people who have struggled in college because of drugs and alcohol. I do not really know the statistics about the relationship between alcoholism and who pays the tuition, but I imagine there is some (even if slight) correlation between the two. If the student is more focused on their curriculum, they may be able to stay away from these growing college trends.
Once again, I am not telling you to stop contributing to your 529 plan. I am simply just giving some reasons why it may help them get a better grasp on life if they paid for it themselves. You many want to have a combination of them paying for some themselves and you contributing some. My professor in college had a great plan for his kids. He told them that they would cover the costs for them to go to an in-state public school. If they wanted to go elsewhere, the rest would be on their dime.
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Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
It’s hard to argue your points. One addition I would include would be that if they had to pay for it themselves, it would give them a better sense of accomplishment when they graduate.
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I agree with this post. My dauhter is 20 and has gone to a couple of semesters of school that I paid for. She isn’t sure what she wants to do and to me, is wasting time & money not knowing, so she has to pay for whatever classes she takes in the future. She works full time so she has to go to school part time.
I’ve gone to two semesters of school that my father has paid for. I don’t drink or party, and I get great grades. As well, I don’t throw a fit if I ask my parents for money and don’t receive it. I don’t ask my parents for money, period. My father pays my tuition. I pay my $1250/month rent, my $300/month utilities, my $130/month car insurance, and I buy everything else I need, including groceries and schoolbooks. I go to school full-time as well as work full-time nights to do this, because the city I live in is as expensive as hell. My sense of accomplishment isn’t going to come from paying my way through school, it’s going to come from working hard to graduate while supporting myself and keeping a household running.
I resent articles that generalize to this degree, while the authors often have knowledge only of the circumstances of those around them.
@Jamie – It thrills me to death that you are successful with your schooling. I never said that everyone was like some of the things that I described in the article. I know many people that are in the same situation that you are. Their parents pay for their school, they pay for everything else, and they make the deans list every semester. I just feel that it is a rarity in these times. You must have been brought up extremely well in a great household. I just know too many people who fall into the traps that I brought up in the article. I would say that you are in the extreme minority. Besides, I looked at the parents side on this post and not the students.
I feel like Jamie, that there are students out there whose parents pay for their schooling and yet they come out being successful with out all that is mentioned in this article. Lets face it, sometimes it is too difficult to pay for things like rent, food, car, etc. on top of tuition. However, lets also face it…Any one that has gone to college knows that all to often we run into students who are not paying for their college education and perhaps they should be. I think parents need to find a happy medium in assisting their children. For example, if someday down the road I have a child that does well in school and is responsible and desperately wants to go to a great college, but needs financial support, I cannot say for sure that I will not help them. I do think though, that my child will be responsible for paying for a good chunk of it, as well as all the other costs in their life because lets face it, if they are an adult they should become responsible like one and pay for things “as much” as they can. Not be dependent on me, their parent, to always bail them out when they need it. After all what is that teaching them? Certainly not financial independence. It is the parents out there that give the hand outs all of the time that are not only hurting their own bank account, but their children. I know plenty of people in Bobbi’s situation that have paid, or are paying for their child’s education and then the child ends up either not using the degree, or keeps flip flopping from school to school not knowing what to take up. The majority of parents do need to stop and think about what they are doing before just shelling out the doe. It is NOT bad parenting to give your child some financial independence, you may just be doing them a favor. Just watch Opera she’ll tell ya!
I intend to save enough to pay for four years of in-state tuition if I have children. My parents didn’t pay for my college education, but they would have helped out if I’d needed it. I ended up at my state university despite acceptances and large scholarship offers from a couple of top notch private universities because my parents couldn’t afford anywhere close to their expected contribution as determined by the FAFSA and it just didn’t make sense to take out tens of thousands of dollars in loans when I knew I had graduate school in my future as well.
I’ve had classmates who “paid their own way” primarily with loans who had no more sense of what their education meant than the worst of the people whose parents footed the whole bill. I’ve also seen plenty of hardworking students whose parents paid as well many who got large scholarships or worked two jobs. I’d love to see some formal studies on this type of thing, but I don’t think it would be possible to control for all of the outside factors.
Fortunately, I got a good education from the state university that was willing to pay for everything and provide a stipend. That has put me in above average financial shape since i was able to finish undergrad with substantial savings instead of loans. I’d like to help pass that good start in adult life along to any future children.
@Adam – I appreciate the clarification and, without taking myself into consideration, definitely do see yoru point. There are a lot of people who need more responsibility in their lives and maybe that is what is most important. Despite my father paying my tuition, I do have a signifigant amount of responsibility, both financially and otherwise, between running a full, busy household at nineteen and maintaining my GPA.
I think what is most important is figuring out what level of responsibility will most benefit your children.
Good points. I am saving for education in a ROTH. If my kids need it, it’s there. If not, it can more easily be used elsewhere. My hope is they don’t need it because they have scholarships!
I have to agree with what E.C. said, namely “I’ve had classmates who “paid their own way” primarily with loans who had no more sense of what their education meant than the worst of the people whose parents footed the whole bill.”
At a certain point, loans just don’t feel like “you’re paying.” Knowing that I would have $40,000+ in loans upon graduation made it hard to associate payment to any particular class. And I had friends who had full scholarships that were extremely diligent and carried 4.0s (or close to) at a school where that’s extremely difficult to do.
Although I think a lot of your points are valid, I feel like the “we will appreciate it more if we pay our own way” argument should be put to bed.
@Stephanie – I agree with you that there are many in both camps that are really bad at school in general. I just see more of the bad things in the ‘my mom and dad pay for it’ camp. That’s just my perception. I really do not know what the actual statistics are and I would be very happy to see some research done. I really doubt there will be though, unless I do it myself. I don’t see that happening the in near future! 🙂
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I agree with you. Some people are not college material, which in no way guarantees that they cannot attain financial success without it. In fact, it takes more than a college education to succeed. And that “more” alone can be enough for great success.
I shudder when I think of those who accumulated huge debt for their educations, and therefore have to earn much more in order to begin a clean financial slate. And I shudder for myself, because I see something highly wrong with overpaying for professional services because I am paying for someone’s educational debt. These, however, are those who truly need the education for their career, and the ones who have the ambition, intelligence, and what it takes in general to succeed in their profession should be able to get that education on their merits – through scholarships and the like.
I live debt-free today, but of the debts I took on in the past, my student loan is the only one I really regret. It was not that big, but it was an infuriating waste that I couldn’t afford to pay back, but was literally forced to do so. On the positive side, it was a big part of my decision to never finance anything again, so if I can do that indefinitely, perhaps it will have been worth it.
i wish my mom would help me out!
im in a relationship where my boyfriend has become extremely emotionally abusive. I am scared it will escalate as he has begun throwing things, slamming doors, and yanking me awake, on a near constant basis…but I can’t afford to move out. 🙁 This happens constantly now. He even gets mad if I go to bed late because I am doing homework or studying…but he will still be awake, so it’s not like he is trying to sleep. When I go to bed later than usual, he will yell at me and pull off the blankets for about an hour so that i cant sleep.
i hate having to rely on financial aid and loans. i am always so scared of losing them and having to drop out…i can’t find a job (and I can’t drive…not that i can afford a car anyway)…and i might lose my Cal Grant because my mom made too much money this year. D:
Also, i go to school in a rich area so it hurts seeing kids enjoying college life and stress free.
I am very resentful, because my mom literally wasted over $10,000 before I went to college.
I want to be able to move out…esp. if the relationship becomes abusive…and I want to study abroad and learn languages…i want to start a company…
i feel really depressed…my whole life i dealt with emotional abuse growing up…and now that I am FINALLY out on my own, i am still dealing with it (and more).
ps: my mom had me in her 40’s…and is 62 now…i understand she just wants to relax…:(
i have my major and minor declared (business, marketing/advertising) and i love learning stuff on my own. I enroll in the maximum amount of units and get a’s and b’s in all my classes.
Anyway…im feeling kinda depressed figuring that after my midterm today (which my boyfriend ridiculed me yesterday for staying up to study for), and then had to fix my breaking laptop (i am currently typing on the usb keyboard since my boyfriend left his coffee on my laptop and it spilled.:()..but the screen went black and the sound failed earlier…anyway, then he wanted me to write his coverletter for an internship. He wrote nonsense that obv. only took around 5 minutes to write. I told him that he had to go more in depth and he flipped out and ran off.
i hate college (ps: my mom never taught me to drive because she has a fear of cars, and my boyfriend thinks I’ll crash his car although he will always criticize me for not renewing my DMV – ive done it twice, and he would teach me for around 1 week whilst yelling and yelling…and then stop.)
🙁
sorry for the rant…im so depressed tho! this advice is just an excuse for ppl to be cheap with their kids.
My mom is nice and she is older now…so I can’t expect her to help…i just wish she could >o< Esp. since i might not get a FAFSA renewal. D:
so…depressed…
@Sally,
This sounds like a very difficult and upsetting situation. From your post, it seems like the majority of the stressors in your life, however, do not result from financial strain.
If your boyfriend is throwing things and yanking you out of bed, the relationship is already physically abusive. You should not wait to get out. You say that you cannot afford to move out. You cannot afford to stay.
College is a wonderful opportunity and an education is one of the most important assets a person can have, but your health (physical and emotional) really needs to be a priority.
Get out of the relationship, get out of the apartment, move back in with your mom if you need to. If this means taking leave from school for a few semesters, that would be disappointing, but you can complete that later. You can put that on hold. You cannot, however, put your well being on hold.
@Sally – I hope you’ve moved out by now. I grew up in an abusive home and can understand your situation.
I know that there are good students whose parents are paying for college, but it sounds as though the ones who’ve commented here are responsible for their living expenses. It’s often the students who are having everything paid for them who tend to take it for granted. It’s also the students who are having everything handed to them which are making the colleges a rowdy and unpleasant place to be. A student who’s responsible for paying his/her own way is probably more likely to look at ways of doing college more cheaply, ie, though credit-by-exam programs.