Money and Child Raising: Saving for Child’s College

Over the few months, we’ve been talking about many of the decisions that parents will face over the course of their child’s life. It’s not an easy task you face as a parent, although this should not be a surprise to you; being a parent is one of the most difficult tasks you will ever face. As a parent, there’s a lot of different decisions that you will need to make, from whether to breast or bottle feed to whether to send your child to a public or private school.

On the subject of education, one of the last things that you can do to affect your child’s life before he or she becomes an adult (or at least is old enough for most people to consider your child as an adult) is to pay, or not pay, for his or her college education. Of course, while this might be one of the last things you do before sending your child off to college and then into the real world, you can’t expect to do so successfully unless you get a much earlier start on it, shortly after (or possibly before) your child is born.

This child might already be too old for his parents to save enough for college...
This child might already be too old for his parents to save enough for college…

But there is a question about whether you should help your child pay for their college education at all. It’s a complex decision, and there are more than a few issues that come up when it is considered, from your financial needs to your child’s independence. That sounds like a good reason to cover some of the pros and cons of saving to help fund your child’s college education.

Pros of Saving for Your Child’s College Education

-Minimize Your Child’s Debt: If you’re a recent college graduate (or perhaps still attending college), you’re likely already aware of just how much debt you can accumulate trying to get a college degree nowadays (around $27,000 on average¬†as of the start of this year). By putting aside money for your child’s education, you can help to keep that to a minimum. You won’t (and probably shouldn’t) try to pay for a full college education, particularly given the ever rising costs, but helping them out could serve to make their post-college life easier.

-Encourage Your Child to Attend: If you really want your child to attend college, it’s good to spur them along as they move toward that stage of their life. Admittedly, there’s plenty of other factors that will determine if your child ultimately attends colleges, but knowing that he or she doesn’t have to put in quite so much of his or her own, probably very limited, funds, will help to spur him or her toward college. (Whether you should push your child in that direction is an issue for another day.)

-Can Give Your Child More Time to Study: If you don’t cover the college costs, it leaves your child to do so, either by borrowing it as we discussed above or by earning the money through part time work. If he or she goes for the latter option, it will necessarily decrease the amount of study time that your child has. If you’re hoping that your child does well in class, particularly in a difficult major, such as the STEM (science, technology, engineering and mathematics) majors, it might be worth paying for much of the college costs if only to allow them a better chance to succeed.

Cons of Saving for Your Child’s College Education

-It Takes Money Away From You and Your Investments: Let’s be frank, the more money you spend on your child, whether for college or any other purpose, the less you will have available for your own use. Investing for your child’s education will leave you with less money to invest for yourself. As much as your child would love to have less student debt, I’m fairly certain he or she would like to avoid having to provide for you in your old age even more.

-Decreases Your Child’s Stake in Their Education: The more money we have to pay for something, be it a car, a house, or an education, the more value we tend to attribute to it. If someone needs to pay for his or her education, he or she is going to attribute more worth to it than if it comes free. In this case, your child is going to have a better sense of just how expensive college can be and how much effort should be applied to get the most out of the college experience.

-Can Give Your Child Too Much Party Time: It’s worth remembering that when we talk about the college experience, most parents are talking about learning and building useful job skills. For many teenagers, though, college is a chance to party without having their parents around. While it’s impossible to guarantee that your children won’t do so, if your children are working to help support their college attendance, they will have that much less time to spend partying. Not a perfect way to prevent any college partying, but it should help cut it down.

My Opinion

This is a tough one. As I’m currently paying down more than $48,000 in student loans, most from spending a mere two years in graduate school, I definitely would like to give my girl as much help as possible to prevent her from facing the same situation. (Let’s not even consider the rapidly inflating costs of college; I’m guessing that she could accrue a $48,000 debt from a single semester at a state college by the time she would start her schooling in 2030.) That said, for now at least, I’m not in a position to provide much in college investments for my daughter (that $48,000 in debt is going to take most of any money that I can put toward college expenses for the foreseeable future). As she gets older, I’m hoping I will be able to provide more money to help her along; I’m still fond of my plan to match any savings she puts toward her own college funds, as I think that will definitely help her to understand the importance of saving to meet her goals while still giving her more of a head start in saving for college than she could get on her own.

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