Once in a Lifetime

February 11, 2020 By Kristan L. Anderson, CEBS, CFP®

I have a confession to make. I didn’t save enough to send my daughter to the college of her dreams. Don’t get me wrong, I started saving for college as soon as she was born, but it wasn’t at the $500 a month or more level that the projections recommend. I saved a cool $100 per month. In all fairness, I was aware that my parents were also putting aside some money each year. But even if I add it all together, which I do occasionally, it isn’t enough to fully pay for an out-of-state private college, the epitome of high cost education. Despite this knowledge, I haven’t really let it worry me too much. Either she gets a good financial aid package, or she goes to a school we can afford. Sometimes it’s that simple.

A recent opinion piece in the New York Times caught my eye, because it directly spoke to the conundrum that middle class parents face when considering college funding for their children. Caitlin Zaloom, an associate professor of social and cultural analysis at New York University writes about her research project which involved interviewing middle class parents about their struggle to afford college for their kids. Put aside that parents think paying for college is a moral obligation and that going to the “right” school should help solidify a child’s own middle class existence, what struck me is the lengths that people will go to fund this future cost. “For those with middle-class jobs, saving enough for college would mean compromising on the sort of activities — music, education, travel, sports teams, tutoring — that enrich their young children’s lives, keep them in step with their peers, deliver critical lessons in self-discipline and teach social skills” (Zaloom, 2019). That strikes me as sad and short-sighted. It’s the financial equivalent of seeing all the parents videotaping their children’s performances, rather than experiencing them in real time. Because everything is better on video, right?

Another part of the article that hit home for me was how parents are more than willing to jeopardize their own financial security to be able to finance 100 percent of the cost to send their children to the very best schools possible. As a financial planner, I see it all the time. We have to constantly tell parents not to fully fund anticipated college costs at the expense of their own retirement accounts, or having an emergency fund, or other liquid assets. This subservience to our children is a much bigger issue than just education costs, so it is worth investigating the psychology of what is going on here.

I can’t say I have all the answers. Like everyone else, I have planned to the extent I can and hope that things work out for the best, like winning the lottery (or getting substantial help from her grandparents, which is discussed in the next article). But I also am unwilling to take away opportunities to learn and grow now, when it really matters most to my child’s development. For her, that would mean no School of Rock, which has taught her so much and challenged her in ways that public school never could. I’m also not going to assume that any higher education she gets is going to catapult her into some different financial stratosphere in which she will be able to care for me and her father, because we impoverished ourselves to send her to NYU. I don’t think it works like that anymore.

Meet Kristan L. Anderson, CEBS, CFP® ».

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