<p>Folks- don’t be so literal. It doesn’t matter where the $300 is coming from- the point is that through the miracle of compound interest, saving vs. consuming will yield a very big number after 18 years. Buy a car and keep it 12 years- that’s a cheaper way to own a vehicle than to buy and trade every two years. Buy a high deductible insurance policy (if in fact you are a prudent driver or prudent home-owner) and plow the savings into a college account. I’ve got neighbors who file claims for every lost camera ($300) and rain soaked carpet ($800 in their family room) and then complain how high their home-owners policy is. Our homes are virtually identical (small development) so I cannot imagine having “blue chip” coverage to pay out minor losses instead of just insuring the catastrophic loss of the house.</p>
<p>But I digress.</p>
<p>Plenty of young families spend money on things they don’t need but can’t imagine living without. That doesn’t mean they can’t cut back.</p>
<p>It isn’t a matter of being literal. What bothers me, is that the “cell phone” or in other cases I have heard “flat screen tv’s” are often thrown around, as if people who have not got enough money to pay their full college tuition would surely be able to pay if they just didn’t have such luxuries. </p>
<p>I think it is fair to say not to waste money, or you don’t need to add expenses for the latest and greatest and fancy new cars etc. and eventually those savings can grow. I follow those rules myself, believe me. But to imply the items that are now considered basic, are too extravagant for some people and that is why they are in trouble comes off a condescending. </p>
<p>Also, when someone uses those figures as a specific detailed example, it implies there is some fact to their example, and it just isn’t true. Yes, 300 saved can grow, but to flippantly say well, just get rid of your phone and cable and you should have plenty of money for tuition does not exactly work out.</p>
<p>Again, I am not disagreeing with the concept at all, I just think when a bad argument is used, it actually takes away from the message. </p>
<p>Parent, I agree with much of what you say but at the end of the day, I am often astonished at the lack of financial literacy among people who are successful in other aspects of their lives. And of course it’s none of my business how they spend their money-- but often someone I know in real life will look at me like I’m from Mars and ask, “how the heck did you manage to send your kids to XYZ schools” and it strikes me that gosh- they really have no clue.</p>
<p>My former boss- who made more than I did (I never quite figured out how much more until I got promoted to his level)- he had a country club membership- I did not. Brand new cars- every other year- and a new car at HS graduation for his kids. Needless to say- I did not. December was skiing with the family- MLK weekend was a “getaway” for him and his wife; February his wife and kids went to a beach somewhere- he usually couldn’t join them due to work commitments. Summers were jam packed with activities and travel. And yet he couldn’t quite get it together to cobble up a college fund for his kids. And certainly couldn’t afford to pay full freight out of current income (everything was “committed” to maintaining his lifestyle). </p>
<p>Did I feel sorry for him? No, he’s an adult and obviously he had plenty of time to look at his six year old or eight year old and calculate “gee- little Susie might want to go to college someday”. But the endless self-pitying he indulged in come senior year once he realized that no- not eligible for a nickel of need based aid. And yes- he’d be expected to pay his EFC whether by borrowing, tapping the equity in his house, or just freeing up the cash. Rude awakening. And then eyeing the folks who worked for him (he knew our salaries although obviously, not our spouses) and realizing that if we could do it he probably could to, but for having lost 18 years.</p>
<p>This is financial illiteracy to get to a point where you are earning an executive level salary with terrific benefits and other than your 401K and stock options, not to have “trimmed the sails” at some point to give your kids some choices come college time.</p>
<p>I have young employees in their 20’s who need to raid the petty cash drawer before they leave on a multi-day business trip because they have $2 in their wallets before they leave for the airport. Tapped out at the cash machine until payday. And before you get caught up in how sad it is to be paying off loans for college (which it is) and how hard it is to make ends meet in a big city (which it is) these are kids who know what “bottle service” is in a club, and women who wear shoes equal to my mortgage payment, and eat out every night because making pasta and chili in your own kitchen is “so sad”. (that’s a quote).</p>
<p>In the case of my post, I used cell phones and pay TV as an EXAMPLE of things for which people at one time didn’t spend any money on, but could potentially be areas to trim back on to generate money for college savings. As others have said, it’s a choice, and I respect that. Everyone needs to make their own decisions on whether things they spend on are wants or needs. But whining about not having enough (or any) college savings after spending years paying for the unlimited cell data plan, when the much cheaper pre-paid voice and text plan would have sufficed, doesn’t cut it. Did you really need to watch those videos on your phone of a cat playing the piano? You could substitute any number of things for cell phones and pay TV depending on the individual: the daily frapacino (or whatever overpriced beverage), the monthly professional manicure, the lawn service, etc. And I’m not talking about saving enough to be full pay at the priciest privates; I’m talking about saving enough so you can afford the balance at your kid’s school of choice after financial and merit aid are awarded.</p>
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<p>A cell phone that makes phone calls and sends and receives text messages is basic. The newest, gotta-have-it iPhone whatever with the mega data plan may be extravagant, depending on what an individual’s present and future needs are. To figure this out requires the basic financial literacy that blossom discusses above, as well as a little foresight and possibly some personal restraint. If that attitude is condescending, well, so be it.</p>
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<p>The figures I provided as a specific detailed example are my own figures, they are factual, and they are absolutely true. Will they apply to everyone? Of course not, but I am definitely not outside the mainstream. I could get rid of my pay TV and get a bunch of free HD channels with an antenna instead. Would it be as nice as getting ESPN and watching a lot of other channels that are only available with cable or satellite? No, but it wouldn’t kill me. (I don’t think it would even hurt. At least not much.) If I got rid of all the cell phones in the family and cancelled the monthly service, people wouldn’t like it, but we would survive. Not long ago there was such a thing as a world without cell phones, and it wasn’t miserable. As I said, dumping pay TV and cell phones would save me about $300 a month. That’s a true fact. Does this apply to every family? No. Some families are living paycheck to paycheck, spending only on absolute necessities. But there are plenty of other families out there who match the description provided by blossom in post #42.</p>
<p>I believe this is where we are having the disconnect. Go back and read my post, or don’t. I don’t really care. We are not fundamentally disagreeing with the concept of overspending combined with not saving being an issue.</p>
<p>Uh, where, exactly? You don’t think my numbers are accurate? Can’t help you there. My personal example doesn’t apply to everyone? Already acknowledged; every family is different.</p>
<p>I don’t doubt that you have accurately described your current cell phone / cable bill. I am questioning that a person trying to pay for school now could have had 100k (or whatever number you came up with I don’t feel like scrolling back) if only they had gotten rid of their cell phone and cable for the past 18 years and invested their 300/month, which is the number that you used to get to 100k, implying that for the past 18 years they could have been saving 300/month on those two things. That is all. </p>
<p>It’s not those two things, parent. It’s any two things or five things or twelve things. If you plan to put away X dollars per month and do it diligently for 18 years, you will have a much bigger number than X times 12 times 18. Put it in an index fund for the first 15 years and convert to a bond fund for less fluctuation before you need to pay tuition. Put it in a growth oriented mutual fund. Whatever.</p>
<p>The point is that it is very hard to save up enough TODAY if you didn’t have the foresight to start before your kid becomes a senior. And if you had the foresight and the cash but chose to spend it on other things- yeah, I get that. But don’t criticize the folks who did without HBO and whatever. They made a different choice than you did.</p>
<p>OK, one last time. Yes,it is hard to save enough today if you didn’t have the foresight to start before your kids became a senior. I never said it wasn’t. </p>
<p>Again, I only objected to the EXAMPLE given, which didn’t seem realistic to me. I don’t believe that by simply eliminating the cable and cell phone bill for the past18 years, the person would have an extra 300/month to save, when 18 years ago I don’t believe cell phone bills and cable bills combined would even have been 300.00/month. I think it would take more that. My thought was that not everyone in the household even had cell phones back then, I know I didn’t. And most 12 year old’s didn’t so I don’t think there was an extra 300.00 to be gained in that particular way. </p>
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<p>Um, I never criticized anyone or their choices nor did I say, I didn’t make those same choices. In fact, I never mentioned my choices at all. But if you must know, my entire life is scrimping and being what some would call “cheap” to the extreme. I drive cars so old, that they can now be called “classics”. But that was my choice and I never complained about it or mentioned it here. </p>
<p>But, really we have worn this point out. Yes, you have to save if you want money for the future. Yes, it is hard to do that unless you are very wealthy. without giving up some of the luxuries and what some would consider basics. No, I don’t think just giving up a cell phone and premium cable 18 years ago would have allowed a person to have earned 100k in today’s dollars. There is really no other way for me to say the same thing over and over again. I don’t think we are actually disagreeing on the concept, again I just found the example a little condescending. </p>
<p>When did I say that my combined cell and TV bill 18 years ago was $300? I even told you in post #32 that I was talking about now, not 18 years ago. If the money 18 years ago wasn’t to be found in inflated cell and cable bills that today pay for so much more stuff (fluff?) than they did back then, it likely could have been found somewhere else.</p>
<p>Perhaps it would be helpful for an article to focus on how to get kids from no-savings families to earn a Bachelors degree, instead of finger-pointing at the parent’s choices. Those are over and done.</p>
<p>I recently ran across my high school graduation program. I graduated from what was and is still considered the best suburban district in the state. I was surprised to count up the college matriculation data listed on the program…about 1/4 of my classmates started at CC. This was when tuition at UW or WSU was under $1000 per year. The area was in a serious recession and many of my classmates had unemployed parents. </p>
<p>If you have no savings, unless your child is a stellar outlier in some way, look at local options for the first 2years. Make sure your kid understands the transfer requirements to the in-state 4year school of their choice. </p>
<p>It’s not about cell phone bills…it’s about finding what your family can afford now.</p>
<p>Or how about an article on how to start saving for college now for your infant child? In that case, it is about cell phone bills… or any other expenses that aren’t absolute necessities that can be trimmed to provide savings that will grow significantly over time.</p>
<p>It’s ironic that those who just blow their money on cruises, other expensive vacations, eating out, shopping sprees, etc can more easily cut back than those who have spent their money on things like a house in an optimal area, taking on care of an ailing relative, parent, or other such things that are not so easy to stop the money flow cold turkey without a lot of ramifications for other family members. </p>
<p>In many families they tried to save but recession hit their jobs, their savings, their healthcare costs – we are one of those. We scrimp and save but it’s not earmarked for college, it’s for retirement/emergency. There are no fancy anythings here, just a lot of coupon cutting.
I do feel like a failure financially at times - why can’t I earn a lot of money so my kids can have whatever they want? But it’s not productive to think like that and just a recipe for depression. So I’m just focused on findibg the opportunities that are available to us.</p>
<p>We have friends who really got wiped out about 7-10 years ago. They did it all right, but their investments including those in 401Ks tanked, followed by a job loss–truly a major blow and then the primary breadwinner did not find another job close to what he had for a while, and then OOS and too far and expensive to commute which meant selling a house in an abysmal housing market. So they had to draw on savings when the market was way down. So their income now, though back up there, has to cover retirement plans and situations. Not to mention a major medical condition is in the picture. Those schools tooting their horns that NO Student should hesitate to apply due to need do not extend their full need met guarantees to those whose parents can’t or won’t pay for the college costs when the formulas say they can. That’s a sizeable niche in the student population qualified to go to the top schools that cannot. </p>
<p>"It isn’t a matter of being literal. What bothers me, is that the “cell phone” or in other cases I have heard “flat screen tv’s” are often thrown around, as if people who have not got enough money to pay their full college tuition would surely be able to pay if they just didn’t have such luxuries.</p>
<p>I think it is fair to say not to waste money, or you don’t need to add expenses for the latest and greatest and fancy new cars etc. and eventually those savings can grow. I follow those rules myself, believe me. But to imply the items that are now considered basic, are too extravagant for some people and that is why they are in trouble comes off a condescending."</p>
<p>Just out of curiosity, do you consider a flat screen TV a “basic”? I don’t. My TVs are all 10 years old and I have basic cable only. I think a flat screen TV is a perfect example of “type of thing you can scrimp on.” I’ll grant you cell phones are basic these days. </p>
<p>I don’t consider flat screens a necessity. In fact in my house we don’t have them everywhere either. But if one of our TV’s finally gives up the ghost I am not sure I could find a store that sells anything but flat screens these days. So, yes going forward flat screens are basic. If you are allowing people who can’t afford 160k for college tuition to own a TV, then I would say flat screen would be the only choice. </p>
<p>Oh, I’m not saying they shouldn’t own a TV. (I’m not saying anyone “should” or “shouldn’t” do anything with their money, to be honest.) I guess this is the kind of frugality I mean - I have 4 TVs in my home right now, master bedroom, guest room, family room, finished basement, all over 10 years old. If one were to break, I doubt I’d go replace it. I’d just move the others around because the two that I consider “necessary” are the master bedroom and family room. I think what’s been talked about here is simply a certain mindset of combining frugality and don’t-need-to-have-the-latest on some things, that enable other things (such as having enough $ to be full-pay). We all have our indulgences, of course, and again, I’m not telling anyone what to do with money - just making observation that person X’s necessity is person Y’s luxury.</p>