Friday, 27 January 2012
…And I don’t feel guilty about it. Nope, not even a little bit. While it may sound harsh, it makes sense for our family. When I was pregnant with our first child, my husband and I went back and forth on how much we should save for her college fund. We decided to start a 529 college savings plan and put money into the account monthly. We did this for six months, and really felt like we were giving our daughter a great advantage in life.
Well, things changed for our family. Because of an unexpected illness, I had to leave my job when our daughter was five months old. I became a stay at home mom and our income dropped by 40%. We quickly had to reevaluate our spending and saving plans. We cut out a lot of our unnecessary spending and were still saving for her college fund and we were doing ok. We planned to have me return to work in nine months and our income would go back to what it once was.
Then, things changed for our family, again. We experienced all the benefits of me staying home to care for our daughter. And, I couldn’t imagine missing any more moments with our baby girl. We crunched the numbers again and had to make some tough decisions to make being a SAHM work for us for the next few years until our daughter started preschool. We cancelled cable, switched to cloth diapers, cooked from scratch, and made our own laundry soap, to name a few. Then we had to really question whether or not we should continue saving for college.
We did a lot of research and lost a lot of sleep. I found out that rough estimates of college tuition in 18 years for four years in an in-state college would be around $200,000. YEESH! I don’t even want to think about what it would cost if she went out of state or to an Ivy League school. When I really stopped to think about it, I realized that while we had only 18 years to save for her college expenses, she would have her entire working life to pay off her own college loans. If she even chose to go to continue her education.
My parents were not able to save money for me to go to college and they were very honest about it while I was growing up. I knew in high school that if I wanted to go to college, I had to do it myself. I worked hard, earned scholarships, chose to go to a school close to home (so I could save on rent), and worked while going to school. I was able to graduate in four years with ZERO student loan debt. I am still very proud of myself for achieving that! Not having money handed to me for school forced me to learn the value of money and taught me how to work for my own goals. That lesson has stuck with me and I am still so grateful for that experience.
So we stopped saving. After our bills are paid, all extra money goes into our emergency fund. Right now, saving for an emergency is more valuable to our family than saving for something our daughter might use in 18 years. After I return to work, we may start saving for her again. But if we don’t, I still won’t feel guilty. For me, teaching her to work diligently towards her own goals and be financially responsible are invaluable lessons that will benefit her throughout her life.
Are you saving for your child's college fund or not? Why?