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@rattles: so true... Something's got to change!
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@rattles: yeah, we were told $500 per month per child... Starting from infancy. Gaaaah!
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@rattles: @kml636: The projections include living expenses (rent/food/utilities/etc), which make up a large portion of it. So you could contribute less and still have enough to cover only tuition (if that's your goal).
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@lawbee11: I get that, but that'll be the number needed by parents who are looking to prevent any loan debt. We're aggressive savers (heck, we're saving already for our kid that's still in utero), but I can't help but feel like there are other priorities and possibilities that make it mentally (never mind logistically!) hard to put that much aside into an education-specific plan. I'm in the plan-for-the-worst, hope-for-reform camp!
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I think for many/most people of childbearing age in this country, even contributing half of that projected $500-600 monthly is unrealistic. $250-300 per month from infancy to only cover tuition 18 years from now is crazy. We make 6 figures and $500-600 529 contributions are not feasible with aggressive retirement savings. Not even for one child, in my opinion.
Agree with @kml636:, something has to change. The collegiate system will collapse at some point if the cost of attendance continues to outpace inflation at the current rate.
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@keepcalmcarrie: @rattles: I think that is why loans are there. As sad as it is, I don't see colleges/universities cutting costs because there are always going to be kids enrolling and wanting to go. Jobs without college degrees aren't very common these days.
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@rattles: That's true. It really is a ridic amount of $$$. I worked on-campus during college and made enough to pay most of my living expenses, so I'm hoping to encourage LO to do the same. I want to pay as much as I can, but I think it's reasonable to expect that she work and contribute some. I'm with you in the hope for the worst, plan for reform camp!
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@keepcalmcarrie: Agree that that amount is unrealistic. We're planning to up our contributions by a lot once she's out of daycare and starts school (public), though, as daycare is currently eating up a lot of $$$.
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I feel mixed. I paid for my own college and grad school and although some people are shocked by it, I kind of feel meh. I am so much better equipped to pay my $300 a month loan now than my parents ever were. I want a large family and hope to be able to pay for undergrad, but try not to over think things like that at this stage. We are lucky to be able to save a substantial amount for each for our kids 529s, to fully fund our own 401ks and afford for me to work part time. I think for me family size is about making choices to maximize happiness and that formula is different for everyone.
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I had a feeling this discussion would turn into paying for college, the cost of college, etc.
I like to look at hard numbers in these discussions, because I am convinced that unless colleges in the US change, they will become obsolete because a $500,000 education isn't going to provide a whole lot of return on investment.
I graduated a lifetime ago, 17 years this July. I attended what I would consider a second tier school (Boston College). My entire tuition bill at the time was about $100,000. I graduated with $17,000 in loans and my first job was $35,000 a year. I paid about $240 a month on my loan and I was able to pay it off about 6 years later, when my income increased and I was no longer eligible for the tax writeoff on the interest.
The same 4 year education now costs $250,000 and I am struggling to see the value proposition. Yes, it's a "good" school and I had a great time there, but did I actually learn anything that applies to my current job? No. I learned what I know about my job through work experience. The thing is though, and I always acknowledge this, is that without my degree, I wouldn't have been able to get a foot in the door. Is that alone worth the cost of a private education?
The problem is that public universities won't be able to handle the overflow if everyone opts out of private. So, as a country, higher education reform should be top of mind, as much as social security.
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@looch: I agree. It doesn't mean it isn't important to save what you can, but I really hope we don't live in a country where, in 20 years, higher education is simply unachievable for 99% of the population. Can you imagine how terrible that would be for wealth distribution- if just a bachelor's degree cost 500k?
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@Sparkler: I love that last sentence I think for me family size is about making choices to maximize happiness and that formula is different for everyone. - so true!
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The "return on investment" is already low for many fields of study. It's going to get worse. Few fields are keeping their edge, and people are starting to flock to them (engineering is quickly becoming more sought after for the ROI and employment capabilities....enrollment is booming at my alma mater), especially when so many in-need companies offer tuition reimbursement. I have a feeling that won't be around in 20 years
Anyways. To answer the question. Finances are always important. It's important to me that I be able to feed and clothe my children and put a comfortable roof over our heads. It's also important to us that we don't stress about money all the time or have to scrimp for every penny. The more...luxurious things are sort of peripheral. They come into play but they aren't my biggest consideration.
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@looch: college costs always become a scapegoat in these discussions.
I completely agree that higher education reform should be front and center. The good manufacturing jobs that people could get in large numbers straight out of high school that provided strong wages, benefits and pensions are long gone and not coming back; which is also something that needs to really be addressed. The financial aid landscape is changing, it isn't as easy today to get grants, scholarships and loans as it was 10 years ago. Many public universities are now funded in the majority by tuition and not by public funding - so are they really still "public"? Legislative funding trends directly impact tuition rates, but get very little press.
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@looch: I agree something has got to give on the cost of higher education. A 6% inflation rate on tuition is just not sustainable in my opinion. HOWEVER, for me, it's important to plan for a "worst" case scenario where things don't change prior to my child(ren) starting school. So we save aggressively for M's future, but we don't put all of her funds inside of a 529 so that we avoid paying penalities if she gets a scholarship, or if tuition does not increase as much as we expect that it will. I think these conversations tend to turn towards college eduation because for most people who are generally comfortable financially, college education is the biggest cost prohibitor to having (more) children. But I think there are certainly people who have much more pressing financial issues that probably should have an effect on their family plans but they either don't want to address them in real life, or don't want to discuss them on an open forum.
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I'm in Canada where going to school isn't outrageously expensive. I only attended CEGEP and that was like $150 a semester + books. My DH went to college for two years for around 5 grand a year (which he paid in full himself). My SIL's 4 year schooling cost her around 30k in a loan, which she buckled down and paid off in 2 years after she graduated.
So honestly, school isn't the main reason why finances are important to me when deciding how many children to have.
I agree with @blackbird: being financially comfortable to me is not living a life where when little unexpected things go wrong (and they always do) I'm not suddenly stressed about where the money is going to come from. It's not about sending kids to fancy camps or buying them expensive video game systems, it's about living a sustainable and comfortable life, which is something I'd like to provide all the kids I have and myself and my husband.
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@looch: I actually agree. I think we're pretty quickly coming to a crisis with the cost of higher education. We have an entire generation crippled with student loan debt. Something is going to give, and I don't really think it's going to take 18 years to do it.
@blackbird: @pui: I agree. For me, it's also about living a comfortable life free from the added burdens of financial worries. I grew up hiding under my bed listening to my parents scream at each other about money. I grew up with the enormous weight and guilt of knowing that I was a burden on my parents because they had to spend money on things for me when they couldn't always afford it. I was fully aware of it and no kid should grow up like that. I'd rather have 1 child and them grow up in a comfortable and secure home, even though I'd really like 2.
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@yoursilverlining: You are completely correct in that public universities aren't so much public anymore. States are providing less and less funding to higher education. For example, UVA is technically a public university but it receives only 10% of its funding from the state of Virginia. It's ludicrous. So they are making up the deficit by raising tuition (currently 32% of the funding for the operating budget). Personally, I feel the state government needs to up the ante and invest back into higher education. It's untenable and something needs to be done but for some reason, higher education reform is never on the docket. I work in higher education and will continue to do so for ability to receive tuition benefits for my children in the future.
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I think people are putting too much emphasis on college costs.
Community colleges and technical schools are also great options if your child is not ready/willing to go to a 4-year school.
Yes, we are saving *some* money for L's college, but I do not expect to cover it in full. My education cost less than $20k (state school) and so did DH's (CC ->state school transfer.)
It is also more important to me to save for retirement. You can borrow money for school but who's going to lend a 75-year old retiree $$$?
The "cost" of children to me is more: Do we have enough to feed and clothe them and keep a roof over our heads while contributing to retirement funds? And not just scraping by paycheck to paycheck? I think we can swing 3.
When my brother and I were really young, my parents were poor. Dirt poor. we didn't have a ton of toys or vacations but we didn't miss it. And we grew up better off than both of my parents did (seriously, some of their stories of growing up are. ridiculous.)
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@dagret: I think most of the people commenting on this thread are also saving for retirement. Obviously retirement is a priority over college education. But it doesn't have to be one or the other. Ideally it's both. I don't think there's anything wrong with trade school or community college, but I'm not going to not save just because she may go that route. I enjoyed college just as much for the experience (if not more) than for the degree. Getting out on your own, living in a dorm, and all that other stuff that comes along with it....I want all that for LO. If she decides she doesn't want that then that's fine, but in the likely event that she does we'd like to be prepared.
ETA: The reason I didn't mention retirement in my initial response is because I would be saving for retirement even if I were child-free, so that has no bearing on how many kids I have. And I certainly wouldn't cut back on retirement savings so that I could "afford" more kids. I assume others are the same and that's why retirement wasn't mentioned.
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@dagret: @lawbee11: I agree. It's both. Retirement will come first, but I still want to and will save money for my child's college education. That's why if I do have children I won't have more than two.
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@MamaMoose: Agreed! I mean, yes, just because I don't think college should cost $500k doesn't mean we aren't saving for it. But I think we're part of the problem, not the solution in this case, because we aren't putting our collective foot down and demanding change.
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@loveisstrange: awww...your story actually made me sad. I agree, no child should have to live like that.
It makes me want to be really cognizant with how I communicate with Dh about anything in front of our kiddo(s).
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The other thing is that the $50k is the "list price." the college savings calculations assume that you'll pay full price for college - that your child won't contribute any of their own living expenses or get any grants or scholarships.
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@looch: I'm too tired to put my foot down
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Just saw this interesting NYT story - "The Reality of Student Debt" http://www.nytimes.com/2014/06/24/upshot/the-reality-of-student-debt-is-different-from-the-cliches.html?smid=fb-nytimes&WT.z_sma=UP_TRO_20140624&bicmp=AD&bicmlukp=WT.mc_id&bicmst=1388552400000&bicmet=1420088400000&_r=2
From the article: The share of income that a typical student debtor has to devote to loan payments is only marginally higher than it was in the early 1990s — and somewhat lower than it was in late 1990s. It was 3.5 percent in 1992, 4.3 percent in 1998 and 4 percent in 2010.
Maybe even more surprisingly, the burden for the people with the most debt is significantly lower today than two decades ago. Someone at the 90th percentile of debt had to devote 15 percent of her income to repayment in 2010, down from 20 percent in 1992.
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It's one of, but not the top reason. We can "afford" (college savings, travel, etc.) to have 3+, but I'm not sure if I can handle 3+ pregnancies, 3+ children.
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@Anagram: To be fair to my parents, they did the best they could. They always, always made sure we had what we needed and they always found a way to make it work. They never treated me like I was a financial burden... but I knew I was. I remember feeling guilty any time I had to ask them for something. I also remember being aware of it from a fairly young age (like maybe 9-10).
Im one of 3, to put it in perspective, and my brothers are 7 and 9 years older. When I was this age, my oldest brother was in college. So they had one in college, one in high school and one in elementary school.
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Financial considerations are important to us, but are not the ultimate deciding factor in the number of children we will have. As long as we are able to feed, clothe, and care for our children while saving for retirement, and are living the life we want and are comfortable, that is most important thing to us. We will not be funding the entire bill for college for any of our kids, but we will help out as much as we can when the time comes. I would never not have another child if we really wanted one due soley to future college costs. What if they decide not to go to college and pursue something else like skilled trade work? What if they are super smart or athletic and recieve scholorships and merits to attend? What if they want to attend a state school or community college and the costs are lower?
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@MamaMoose: Yes, I am spread too thin as it is to take on another cause.
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@loveisstrange: That sounds rough
No child should have to go through that.
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I think that geography makes a huge difference in how imporatnt finances are when considering to kids. I lve in NYC, so to have two kids in daycare will run me 5K a month which I simply cannot pay when paying a similar amount towards my mortgage. This means that I will think carefully about number 2 for sure, both when and if.
I just feel that it is not accurate at all to say that having kids doesn't have to be expensive, it is crazy expensive for me!
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