A friend of mine used to say that nieces and nephews were the best birth control. Unfortunately, later she discovered that infertility was actually the best birth control, but that’s neither here nor there for tonight’s topic. (For the record, she did get her happy ending– two kids via IVF.)
Today, I ended an information session on saving for college and let me tell you: THAT is the (second) best birth control ever: Assuming an after-tax rate of return of 5%, an annual college inflation rate of 6%, and payments made from now until a 2-year-old child is 22, you would have to put away over $1,500/month to fund an ivy league college (and there are many non-ivy’s that cost similar amounts), $1,100 for a private college, and $535 for a public one (including all expenses).
How’s that for staggering?
Now multiply that times two kids and you could see how someone in the middle of a cycle could start to feel a little ambivalent.
Gulp.
(FWIW, I think I am either about to ovulate or I have a yeast infection that doesn’t itch. Not sure if either of those things are even possible. Sigh.)
A rule of thumb from a former financial planner: DO NOT save for your child’s education unless you are putting away 100% of what you need for retirement AND there is money left over. There are student loans for college-there are no old people loans for retirement. Most children would rather struggle a bit through college than have their parents live with them from age 65+. /assvice
This and the cost of daycare are the sole reasons my husband and I are choosing to have only one child. We feel it is our obligation as parents to do what we can to help with college costs. We both had student loans (mine will be complete at the end of summer, my husband we have YEARS left). Our financial situation would be much, much more stable if we didn’t have these loans hanging over our heads. We know we won’t be able to fund his college 100%, but we would like to help with a significant portion.
A yeast infection that doesn’t itch is indeed possible. I had one when I was pregnant. (If this were a novel, that would be foreshadowing.)
Oddly enough, I have a meeting set up with my financial dude to advise us on college planning on the 20th. I’ve heard the same thing as Sam said, but much like Erin, we want to do SOMETHING, even if we know it will not fund the whole cost. I guess we’ll see what the dude says. Sigh.
Our financial planner is in the “don’t save for college unless your retirement is secure” camp, as they all are. But we were actually okay on that front so probably the best thing we did was to put money away right when the boy was born. We pretended that child care costs started with the pregnancy, not post-maternity leave, and that was a shocking chunk of change that will compound for over 20 years. (Presumably the stay-at-home set could do the same thing in reverse, pretending that the stay-at-home parent quit work post-pregnancy rather than post-baby and saving nine months of income.)
Obviously it’s too late to do that for a 2-year-old, but it’s an option for future kids. Also many people (not us) get money from grandparents–ours talk a good game but they never do anything, even after they asked for 529 deposit slips and we gave them both those and postage-paid envelopes. I had no expectation that they’d contribute but I’ll admit I got a little annoyed when they yanked our chains that way.
Anyway, we figure we’ll start the college saving again when public school dramatically reduces our child care expenses.
I agree with sam 100%.
I know it’s *nice* to pay your kid’s way, but there are other ways to get through college. Harder on the student? Yep. But that’s not a terrible thing IMO.
I think there’s a lot of pressure on parents to save & pay that doesn’t need to be there.