<p>sounds good to me deniseC. I guess I don't see why the parents are the ones who need to make ALL the sacrifices. Why not work as a team and spread those sacrifices out a bit? You wanna go to to a 45K per year school...well, let's see. We're a bit short there even though we've been saving for years, and making sacrifices (no fancy houses and cars here). So I'll keep driving my old clunker, cut out travel, keep my old kitchen and bathrooms, won't buy new clothes for a few years, and will work more overtime. But you can contribute too by coughing up some of those savings from those years of gifts, using your summer earnings, maybe taking a small loan or working a small job during the school year (that's what I did). Don't want to do that? Well, there are cheaper options available. What's wrong with that?</p>
<p>To all the youngsters out there, stop procreating at age 38 to make it more likely that you can pay for your kids' education through graduate/professional school, while you are still gainfully employed!</p>
<p>D's "contribution" to educat expenses iwill be approx $18K over 4 years (the current max for fed gauranteed student loans) - - a not insignif debt for a recent grad, but only about 1/10 the cost of 4 years' LAC expenses (not including books. insur, transp or personal incidentals).</p>
<p>"Should my parents have given up the opportunity to buy a digital camera and a notebook computer this summer and fall in order to help me pay for school? "</p>
<p>Here's a good question, at what point does little stuff roll into big stuff. The digital camera and notebook computer, maybe $6K to $10K. Four years of private college is around $200K. There isn't much out there you can give up to come up with $200K. </p>
<p>Kids keep talking about Fendi bags and $50 shoes and cars(okay, I think that was another thread), but are we really talking about 1000 pairs of shoes a year for four years? or $200K cars? or , well, I have no idea what a Fendi bag would cost, but you get the drift. $200,000 is just an order of magnitude larger than any of these splurges, and that's per child, not counting grad school. I think many, many children see their parents spluge on an expensive toy every few years and think that could've been their college fund. When in actuality, it wasn't even close to enough. Very, very few families can easily come up with the money. And many, many family are stuck with the problem that they make too much for financial aid, but no where near enough to spend an extra $50K a year.</p>
<p>mythmom, you and garland are correct. For many families saving for their childrens college is not an overwhelming mountain to climb as long as they begin as soon as each child is born. Most may not be able to save enough to pay for an expensive private but most will be able to save enough to pay for their in-state public university.</p>
<p>Also consider your grandchildren!! My mom gifted all her grandchildren $7500 when they were born. We took that, added about $7500 of our own savings. Seventeen years later that initial college fund had grown to $76,000 without us adding another cent other than paying taxes on interest and cap gains each year. When your children beging gifting you grandchildren, consider starting up a college fund for them.</p>
<p>Something to keep in mind. Death taxes are certainly going to be reinstated after the current law sunsets 12.31.10. So, gifting to children and grandchildren will continue to be a plan. Giving funds for education and medical expenses do not count against the total threshold of gifting. So it behooves those with the means to pay for your children or grandchild's education and not have these amounts count against the available amount to gift in one's lifetime. Hopefully, these kids will appreciate the opportunities that were given them and not be jaded on their good fortune.</p>
<p>
[quote]
According to financial planners, a parents' first priority should be their own retirement. Children can get loans, if needed. If your parents are able to pay for your college education, you are in the minority, and should consider yourself very lucky. Having said this, I must admit that my children "expect" that we'll pay for everything. A little gratitude would be nice.
[/quote]
</p>
<p>The smartest wealthy person I know is a self-employed financial planner. He has 3 kids under age 9. He can probably afford to send them all to private universities right now. But he intends to ask them to take out student loans anyway, someday, so that they have "skin in the game" and will work harder academically. He doesn't so much want their gratitude as their participation in the endeavor.</p>
<p>I am nowhere near his league financially, but took note of his strategy for those have all the financial resources they'll need, but want their kids to be involved. I'm sure he doesn't mean a crushing burden of debt, either. But he doesn't want to buy them a movie ticket and just send them with a merry smile into the theater. I respect his thinking on this. He cares about his children's character, obviously. They can't help it if he's already made them a fortune.</p>
<p>And he also gives the advice to parents to protect their retirement first and foremost, not to be a burden on their children. This means different things to different people. It's no gift to deplete yourself for your children's sake, either.</p>
<p>I've learned you can never know what's inside another person's pocket.
Part of someone else's fat salary might be mailed off to an elder for repayment, who helped out the parent set up a business or attend college long ago, so that obligation comes even before educating the kids of the next generation. Fancy jewelry might have been bought last week, or handed down through the family. You can't tell from externalities, and doing so will only make you sad if you work hard each day for wages.</p>
<p>It may actually make financial sense for your offspring to take out huge loans even when you have the liquidity to pay for the tuition, if the interest rate on the loans is lower than the rate your investments are earning. (E.g., 7% loan vs. $160k in 8.5% fixed rate bonds). You could then assume the payments yourself and end up with something left in your account after making the payments.</p>
<p>I agree that it is a personal decision. However, I cannot imagine NOT wanting to pay what I can towards the education of my children. We, too, started saving for their education when they were born, but we have also been very fortunate to be in a financial position to assist more than we dreamed of years ago. Our retirement is well-looked after, and my H and I both agree that providing our kids with the opportunity to graduate debt-free is a boon, not only to them, but to us. All of our girls have worked summers since mid-teens and have always contributed to their spending, whether in h/s or college. Some years it's more than others but we still have paid the majority of their costs. Their main job, however, has been to do well in school, and they all have. I disagree that kids have to have a certain figure 'involvement', or have to have taken out loans, before they can be considered having 'a skin in the game'. All of our Ds have always been A students, and I cannot imagine any of them working harder at their academics, or taking more pride in their work, and their character is just fine! :)</p>
<p>We are fortunate that we are able to do this for our kids, and we realize that. We also have done it for a niece, and have also assisted the boyfriends of two of our Ds. Like I said, it's a personal choice, and we are grateful for the opportunity to do it.</p>
<p>should parents pay if they have the money?</p>
<p>not really an answerable question outside of depends, because who is the judge of do they have the money? the child?, the parent? the finanical advisor? the neighbors? </p>
<p>Since really only 2% of the population really have the money are we talking about them or the other 98%? </p>
<p>We all know the answer in the make believe world... "sure.. absolutely, I wouldn't hesitate to pay for my kid's education anywhere.." I could have said that and spared the lashing from a couple kids elsewhere.</p>
<p>That's the right answer, the pc answer, but really it only appilies to 2% of the households... </p>
<p>the 98% are faced with other issues....real ones.</p>
<p>Maybe they are caught in a sandwich generation situation, maybe as they approach middle age their solid job position becomes at risk, maybe investment returns from an underfunded pension plan aren't what they thought, maybe their health went south.. yada yada yada... the real world gives us many situations that are readily viewable by others that can make a parent seem harsh... maybe sometimes they are at fault, maybe sometimes the situation they fall into changes things..</p>
<p>being in the financial world, I meet many, actually waaaay to many people who are retiring "RED". </p>
<p>If you don't know retiring red means retiring with significant debt. So much so that I have people wanting term insurance in large amounts (1 million up) in their 60's for as long as they can get it. Not for estate tax concerns or final expenses, but because they are carrying that much debt into retirement. They haven't reduced their debt load to compensate for reduced retirement income rather than a paycheck.... </p>
<p>Most retirement planning theory is based on reduced debt in retirement. You can live on 60% of your prior working income because your debts will be gone... I am running across far too many people that will need a pay raise in retirement... </p>
<p>sometimes it's just not realistic for them to pay for college.. If you're gonna label them as bad people, look around it may be yoru neighbors and possibly even yoursleves in that situaion. Some folks are just a layoff notice away...</p>
<p>It depends on the kid too. My DD and her friend feel bad that they can't contribute more to education. Her friend is planning to attend BYU($3000+ per semester), which I think is dirt cheap compare to $50K per year for private college, but she still feels she needs to be paying something toward the tuition. She wants to be independent. My DD will contribute to books and miscellaneous. I don't expect her to pay for tuition/room and board, but I don't want any sense of entitlement either. I think of it as a gift and I rather spend money on education then $100K+ on nursing home. But I have no qualms with some parents who don't want to pay top money for private college. Afterall, it's their money, they earned it by working hard and they should be able to enjoy it however they like.</p>
<p>D earns all her own spending money; she works in Provost's office and babysits. This year she had some left over and bought her books. She worked all summer, but used the money for living expenses because she couldn't find a job at home and stayed in dorms at her college.</p>
<p>This was okay with me because she is learning responsibility.</p>
<p>S is really laid back. I never made him work in HS because playing two instruments his practice time was precious. He promised to get a small job at college and didn't. He also didn't spend any money. However, I am not pleased that he isn't learning to earn his way into anything or building up a work resume. So, although I will continue to pay for college, I did have to say no more violin lessons until he earns something. Will get back to all of you with results.</p>
<p>But Mythmom, your S is just a first-term freshman! Ours was supposed to be work/study re: working off his loan, but H said "Don't take up a job until second semester. Get your academics and time management under control first." </p>
<p>Can you just pretend you already told your S it was okay for just first term...but next term's another story. I've got an admire/crush on your S because he sounds so excellent in every other way :)</p>
<p>re: #26 Since I don't think I am worth anywhere near $2 million I'm not particularly worried about the sunsettng of the estate (aka death) tax.</p>
<p>I didn't want my son working first term freshman year, but we are encouraging looking for something next term. I think he has enough in savings though to keep himself happy till the summer. Not a big spender...</p>
<p>Well, paying3, the only reason I'm concerned is because he's never earned any money! Was promised a job in music dept./his major. Occasional job of asst. manager for symphony. Couldn't do this (scheduling conflict) but many, many very occasional jobs available (money negligible), but S didn't really try to make connection.</p>
<p>He didn't work summer; the only money he's ever earned are 1) modeling at five and 2) giving two violin lessons.</p>
<p>I just worry about him. Don't really care about minimal work/study money. He's just so laid back; trying to find a way to teach hi to be proactive in some way!</p>
<p>Advice?</p>
<p>"Advice?"</p>
<p>Tell him you guys are having a bit of finanical trouble and it would help out if he put a few hours in for his goofing around money. Who's paying for the pizza and occasional candy bar?</p>
<p>I think parents should set a budget...and communicate it to the child. I think parents should instill expectations in their children about everything from Christmas presents to college and stick to those expectations. I think parents can require their children to take a Stafford loan..make sure the kid knows if you or they are going to pay it off. I think parents should make sure their retirements are set before expending money to send their kids to college. I have a couple Ivy friends who are supporting their parents who "blew" through their wad which is not much fun for my friends. I think parents should make sure their kid has a job, any job, sometime in their life before they graduate from college. I think parents should really try to lead by example. I think parents should never/ever assume that their children will make more money than them. Should parents pay for their children's college if they can? Sure, but kids should never assume what amount "can" means and children should always respect what the parent is telling them.</p>
<p>We can comfortably afford to send the kids anywhere they want to go, but we will not pick up 100% of the cost. We agree with the financial planner's approach.</p>
<p>In our family, the kids have (1) been required to work summers doing something income producing from age 14 (time of work permit) on--working during the school year is optional and neither has chosen to do so; (2) 50% of all earnings and 50% of weekly allowance (equal to age, so 16-year old gets $16/wk) go directly into the bank and does not come out without parental permission until age 18, and (3) they are responsible for 10% of all ordinary college costs (tuition, room, board, fees, books) and 100% of entertainment expenses. If they have sufficient savings to cover their 10%, great. If they need to take out loans, fine. The magnitude should not be crippling. (S1 chose a public and will have plenty of money left over.) We will offer the same deal for graduate school.</p>
<p>Because money cannot be withdrawn from savings until age 18 and sports schedules preclude an outside job during the winter, we set up one other financial opportunity. Cooking, setting the table, and cleaning up a family meal (nothing premade) can earn them $20 (we pay for the food but they usually have to run to store to get ingredients). This allows them to earn money during the winter or extra during the summer so they can finance all of their wants (ski trip, video game, or whatever) themselves without dipping into savings. I just wish they cooked more often. </p>
<p>S1 will be home from college for about two weeks before returning for J-Term, and he has a job lined up for those two weeks doing some landscaping thing. A lot of his friends work for UPS since they need kids to deliver packages during that period.</p>
<p>In short, I think it is good for kids to have skin in the game and lots of work experience. I know some athletes, dancers, musicians and such spend 110% of their time on their passion so don't have the time to work, but our kids are not professional level in their ECs so have been able to balance sports with work and school.</p>
<p>^^^Yes, back on post # 3, I pointed out that two threads were discussing pretty much the same thing.</p>