Most folks gawk at my husband and me when we tell them that we aren’t saving up for our kids to go to college. We hear all sorts of things like how it’s our “duty” to save for our kids to go to college and how our kids aren’t going to survive without a college degree. We also hear how we shouldn’t be saving for our own retirement until we’ve saved up for our kids to go to college.
Here’s the deal. We’re a family of five – meaning we have three children and my husband and I are no strangers to paying for college because as part of our $55k of consumer debt that we paid off in 2015, a little less than $30k of it was my student loan debt from my accounting degree.
Losing HOPE
So yes, I’m college educated and I fully understand the value of a college degree and what it takes to pay for that degree. But honestly, I don’t think a degree is the end-all-be-all. And fun fact, when I started college in the Fall of 2004, I had a full scholarship called The Hope Scholarship and guess what? I lost the scholarship – not due to partying but because I moved out of my mom’s house and to live on my own and I started working full-time while trying to go to school full-time.
My grades took a massive hit, but part of that was because I didn’t fully understand why going to college was important. Later on, I decided that college was the right choice for me and so yes, I had to pay dearly to finish my degree, but I honestly value it way more and I picked a way better major than what I originally selected back in 2004 as a freshly minted 18-year-old Miss Independent.
My husband has only ever attended a technical college and never graduated. My husband currently owns a very successful home remodeling business to the extent that he actually has to turn away work since he’s booked over for over 6 months consistently.
“Life” Accounts
The thing is, I think college is valuable and so does my husband, but neither of us thinks college is the absolute only way our children are ever going to succeed in life. Would it be great if our kids all went to college? Sure, but we’re not going to force our kids to go.
And that is why we came up with “life” accounts instead of accounts that are saving for college specifically. With our children’s “life” accounts the money is freed up to go towards college, weddings, or a big gift at the age of 25 or 30 (depending on the maturity level of the kid…).
Granted, no our money isn’t going to grow as fast as it would with a 529 or ESA plan, but our kids are also not going to be penalized if they decide they don’t want to attend college. Also, there are various scholarships and grants available that my kids can work towards securing (I earned one grant after going to back to school to finish my degree which really helped lower the overall cost of my degree).
****We do use high yield savings accounts for our kids from CIT Bank to help grow the money faster.
Life Account “Rules”
Here are our “rules” for saving with our kids’ life accounts:
- Any checks that our kids receive for birthdays, holidays, or special occasions go into the saving accounts.
- Any cash amounts over $20 go into our kids’ life accounts.
- Instead of buying our kids a bunch of gifts for their birthdays we stick to small/roughly $20 gift items and put $20 (or more if we have the room in the budget) in their life accounts.
- We ask our kids if they want to put any of their money in their accounts (so far the answer is no, but we’re working with them on building up their saving skills by letting them save up their money for specific toys. Hopefully, as they get older they’ll want to watch that savings account number grow!)
But isn’t this bad parenting?
Okay, so yes, someone probably thinks we’re terrible parents for not actively saving for our kid’s college funds through a 529 or ESA plan. That’s okay if you don’t like mine or my husband’s choice – it’s our choice and it doesn’t mean that you have to make this same choice. It’s your family, you get to decide what you’ll do or what you won’t do.
I personally don’t buy into the belief that I have to provide everything under the sun for my kids and make their lives as cushy as possible. Because honestly, I think that by providing opportunities for my children to stand up and fight for something that’s important to them, they’ll end up better adults more prepared to fearlessly engage with life.
The truth is parents, you don’t have to pay for your kid’s college education – you truly don’t. Yes, as someone that had to pay for her own education, I totally get how much easier things would have been if 1). I didn’t lose HOPE and 2). if my parents had just footed the bill. But you know what? I’m grateful that they didn’t and I had the experience of truly feeling the pain of paying for my degree because otherwise, I would haven’t taken earning that degree seriously.
So if you’re struggling with the idea of paying for college, remember that it’s okay if you decide to not pay for it. You’re not a bad parent. In fact, if you’re struggling to pay for yourself right now or struggling to save for retirement, you need to first take care of your retirement before you even think about saving for your kids’ college education.
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