I am the proud father of three grown children. It was always our intention to give them as much of the wonders from life as we possibly could. All of this would culminate with four years of college 18 years hence. Those carefully planned intentions were not designed to begin when each child was a junior in high school. That is certainly not when parents should begin to think about their children’s educational futures, and yet most of the parents who come to visit me in my office for college funding guidance appear to have done just that. They have left the cost of college dead last on their priority list.
Having the necessary funds for college someday doesn’t occur overnight. It requires developing a savings program very early in a child’s life. Few people will ever be able to pay for the full cost of college in the future, but they should at least make an attempt to put something away and let compounding do its thing. Instead, too many families believe that the financial aid system will be there to do the job for them.
This may sound a little harsh, but isn’t relying on the State to pay for your child’s total college education somewhat presumptuous? Those same parents will also complain that the cost of college is too high. That is definitely the case if nothing has been invested for college. I fully understand that many young families just cannot afford to put anything away each month for the future cost of college, but I am referring to the large majority of parents. I am really directing this rhetorically to those parents who complain the loudest but who purchased larger homes than were really needed for a young family, drove expensive, showy cars, went on elaborate vacations and saved little. Now with nothing saved, they want the State to pay the freight.
The needed paradigm shift is for parents to begin a college savings program early in a child’s life, perhaps even before children are born. They should be thinking about this well before they ever begin to save for retirement. As a financial advisor, I can help you, but I cannot perform magic. The media, the wire houses, financial advisors and other professionals need to put much more emphasis on starting the process early.
When my kids were born, we did begin a small but regular savings program. We also made sure that we had sufficient life insurance in place for college in the event of the unspeakable. I also had disability income replacement coverage if I couldn’t work, so that money would continue to arrive regularly to cover my expenses and some savings goals.
We are no longer slaves to our kids, but neither are we slaves to college debt either.