Given the dramatic increases in the cost of a college education, this last argument has taken on a new importance.
[Estimate your net price at 250 top colleges.]
My husband and I were on the same page early on about college educations for our kids. We would pay for them, if at all possible. Still, we know and respect families who have made a different decision. If your family is working that out now, here are some considerations to keep in mind.
1. What is your retirement situation? The choice to pay for a child’s education is certainly a personal one, but most financial experts agree on one point: parents should not sacrifice their retirement funding in order to pay for their kids’ educations.
The reasoning is simple: while there are a number of ways to pay for college (loans, work, community colleges, and more), no one is going to give you a loan for your retirement. That is entirely on you. So, much like putting your own oxygen mask on before helping your child, get your retirement funding figured out before writing checks for higher education.
[Read more about saving for retirement over education.]
2. Does your child have a stake in his or her education? All children are different, but most will appreciate their educations more when they’re required to play a financial role. Even though we foot much of the funding for Lindsey’s college costs, she is still required to keep her GPA high enough to keep her scholarships. She also works part time to cover her spending money. While she has always been a self-motivated student, these two things keep her aware of the investment that’s being made in her education.
[Consider the benefits of on-campus jobs.]
Of course, for some families, parents footing the bill for a student is not a possibility. My husband was one of those students, and it’s probably no accident that he has a strong work ethic. Even if you can pay for all of your child’s costs, it’s probably worth asking yourself if it’s a good idea.
In high school, my parents made it clear that my main responsibility would be my schoolwork, before work or other activities. I always worked during the summer, but my “job” during the school year was simply to get good grades to secure good scholarship money.
I did that, and now that I’m in college, my grades are just as important. At the same time, however, I am older, more mature, and better able to juggle many responsibilities. Whether your parents are covering all of your college costs or you’re expected to chip in, here are some of goals to set when it comes to funding my college education.
1. Grades always come first. When looking for jobs after college, work experience and GPA are both important. But to me, focusing on my studies is much more important than a part-time job to cover my personal spending money. (The one possible exception is if that part-time work is career-focused.)
I am lucky in that my parents are financially able to cover most of my college costs. If at all possible, parents should try to spare students the burden of working on top of a full course load, especially during the first year. Students who work may learn how to handle more responsibility, but they can miss out on things like participating in campus organizations, finding career-focused opportunities, and experiencing college traditions.
2. Budget even if you're not paying. One thing every college student should learn is how to keep a budget. Students who are not responsible for any of their own expenses (gas, food, clothes, social events, and more) may never learn how to control their own spending.
[See what a college budget looks like.]
Too many of my friends have no idea how to track their spending when it comes to things like shopping, dining out, road trips, and the like. Even if parents are footing the bill, teaching students to recognize exactly where their money is going can be a real eye opener.