Invest in Childhood

The Case Against Saving for College

*This article has also appeared on The Huffington Post, with slightly more commentary from others I reckon.

A few housekeeping things right off the bat: The below stance has nothing at all to do with the validity of college savings plans themselves; the investments, management fees, etc.  The opinions expressed here are based entirely on the idea that your money could be, and should be, better spent.  Got it?  Good.  Here goes:

While they’re not a guarantee, the Mrs. tends to enjoy a pair of handsome bonuses each year.  From them we generally budget for a $1000 contribution to each of the girl’s 529 College Savings Plans.  That’s a grand sum of $2000 to 529 college savings plans every 12 months.  Not last year though, and none for 2012 either.  Instead, we used the two grand for 2011 to beef up the 5-year old wooden swing set that calls our backyard home.  As investments go, this wasn’t even close.

How does an enhanced kiddie play structure compare against money for higher education you ask?  Easy.  With the new giant rock wall, fire station pole, and 14″ swoop slide my two girls will spend the next half decade challenging themselves; their bodies, and their minds.  With the 2-story ‘treehouse’ skybox, they’ll enjoy even more years of outdoor play with each other and with friends telling stories, pressing leaves, scaring each other, writing bad poetry, doing their version of improv comedy, writing songs, thinking, and dreaming.  I wouldn’t be surprised if there is some making out in there in a number of years.  Better there then behind the mall dumpster, I say.  What they’ll each take away from the countless hours of fun ahead of them will trump the single 3-credit class + books their $1000 would get them if they were going to college RIGHT NOW!  Forget about 11 years from now for the Bear or 14 years for the Mouse!  That’ll probably cover their parking permits for one semester.  And as they say on TV infomercials, “BUT WAIT, THERE’S MORE!”

Let me make the case that you shouldn’t save one penny for your kid’s college tuition.  Don’t even open a 529 college savings account.  Unless you’ve got $10,000 or some eye-popping figure to toss into that bucket every year (and if you do, you can probably also do what I’m about to say), don’t. even. bother.  Instead, take all the money you think you want to stash away for college and do some or all of this every single year from now until your children are college age:

  • Spend a week traveling with your child; in Europe, road trip across America, rail through Canada.  Pick a different spot every year and go explore, learn then speak a new language, taste new foods, assimilate into the culture of the region.
  • Buy an old car/boat/house and rehab it together.
  • Enroll in cooking classes together.
  • Subscribe to a local theater season of plays & musicals & acting classes.
  • Try to see every Major League Baseball ballpark, or road trip to a cluster of minor league parks.
  • Build them a book nook in a corner of your home.
  • Get pampered at a spa together.
  • Let your child take piano/guitar/trumpet/singing/dancing/gymnastics lessons.  Maybe give that old instrument another try yourself, and learn together.

The key word in all of that: TOGETHER.

If you commit to this plan early on in your child’s life she will be, by the time she is college-age, cultured and will have seen, heard, touched, and experienced more than most humans will in their entire life.  Your child will have lived a life that no collection of textbooks could broach.  She will be smarter, wiser, more humane, more global, and more interesting than any 22-year old tossing a hat into the air on graduation day, and WAY more so than a random 18-year old still undecided on a major.  She will be more self-aware, more observant, more compassionate, and closer to you, her parents.  She’ll be thankful, humble, and adventurous.  [switching gender pronouns now] He will be ready to take on any challenge in his adult life in a way that a student simply confined to walls, dorms, book learning, and classrooms won’t be / can’t be.  And guess what: he can still go to college!  He can work for it which will make the experience longer and more challenging, yes, but also more satisfying and ultimately more rewarding.  How many fresh-faced 18 year-olds waste that first semester or first year of college trying to figure out what they want to be, how to be, who they are, and how to survive in the real world.  Imagine that feeble attempt at instant assimilation and self-discovery and the wasting of 18 years of your saved money.

Maybe this can be read as a case against college itself; I do think it’s terribly overrated for professions outside the highly technical.  But there can be a lot of value in education – probably more value when one is educated at 28 as opposed to 18 – but value nonetheless.  Really, this is a case against the relatively new idea that we must – MUST – stash money away for our children’s higher learning expenses.  That we are doing them a disservice if we don’t or cannot.  I contend this idea is a bit of a marketing ploy by the financial industry desperately searching for new ways to get inside our wallets.  I can make a similar argument against retirement savings, but that’s a topic for another day.

Think about this scenario for a minute:

  • you have two children
  • you save $1000 per child (not a small amount) every year of their lives until each turns 18.
  • you get a 5% return on your investment, on average, every year.
  • after 18 years you have roughly $29,500 per child saved for college.  That’s not too shabby, Congratulations!
  • $29,500 is likely to net each child just ONE (1) year of school, books, & room and board at a public university 18 years from now.*

I’ll argue that what the original $18,000 investment could have given your child over 18 years is more valuable, enjoyable and memory-making then 1 year of college ever could be.  Plus, you won’t ever have to sweat the 529 plan balance bobbing along with an increasingly volatile market.  But the real kicker is that your children can have that year of college too, anytime they want.  But they’ll never, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever get the precious time with you again.  This much is absolutely certain.  And priceless.

A child with 18 years of experience in their front pocket is more likely to know themselves and know what they might like to learn more about in an academic setting and maybe know what profession they’d like to pursue.  College will then enhance their accumulated life learning and feel more meaningful.  Higher learning is more substantial and powerful in its effects when it is earned.  I’ve meet too many people who’ve spent 100k of their parents money or who are saddled with hefty student loans themselves to get their history/English/philosophy bachelor’s degree only to spend their next decade in a call center cubicle.  What the hell was the point?  To think of all the experiences they could have had alongside their parents.  An opportunity gone forever.

Not for us.  We are using what would be their 2012 contributions to a 529 plan on airfare to Barcelona during the Bear’s Spring Break week; a vacation that will take us to three countries (Spain, France, Andorra) over 10 days.  That’s $683 to USAir instead of UPromise, the dividends from which will be paid in Euro instead of greenbacks but the long term gains are expected to be much higher.

The above is just a little something to think about, a not often heard counterpoint to the constant din of “save, save, save” new parents hear regarding their child’s future education.  I’ve seen commercials that are nothing more than a cleverly disguised parental pissing contest about which couple is saving the most for their new baby.  Like we need another thing to compare against each other.

Dismiss this if you wish.  It’s totally your call.  I’ll be off doing something interesting with my kids if you need me.

*This post was also published on The Good Men Project.

*I have no special insight into the future of college costs but it doesn’t take much research to discover what prices were 18 years ago and to quickly calculate what they may be 18 years from now.
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  1. Not only do I agree with you, Jeff, but I’ll raise the ante to include the statement that college is NOT for every kid. What happened to learning trades? Most plumbers make more money than most college grads. Heck, these days, 85% of college grads return home to live with mom and dad ’cause they either can’t get work or can’t earn enough to sustain themselves.

    Let’s look at the whole question of college!!!

  2. Right on, Jeff!! As a kid, I was allowed to drift and dream and explore. I was given the gift of being an exchange student in Norway for my junior year of high school (at age 15). I travelled all over Europe in that year, learned another language (fluently), and came home with an expanded world view. When I went to college, I started at a community college because I KNEW I wanted to be a musician (which I discovered during my year abroad). And even though I was accepted to big 4-year schools with stupendous jazz programs, I chose this community college because of its cost and reputation. I never regretted it. AND I worked and got scholarships through college and grad school, and graduated without the aid of student loans. And I’ve worked in music ever since.
    Parents today need to understand that educating their kids is not just about college.
    Thanks for the great post!

  3. With the dawn of online EVERYTHING, your point is both absolutely right and wrong. First, the good – all of the things you mentioned, and keyword “together” is dead-on and important. Having a well-traveled or at least fun-traveled kid goes far, and giving your kids new and interesting experiences trumps keeping them in a small town until 18, then they go somewhere for college and go wild. Plus, financially-speaking, there are plenty of community colleges, online colleges and trade schools that will do education on-the-cheap and provide the same credentials as a state or U-of-So-and-so school.

    On the other hand – in that aforementioned world of online everything, education’s important. Experience will always outweigh education, no doubt. But in a world where employment applications are online, someone from another state can be applying for a job that your kid is looking at. It might be some form of college that puts your kid above the other guy. Long gone are the days where you’re just competing against the local candidates – now, you’ve got to compete with, depending on your field, international candidates.

    And, something that’s a tough nut to crack economically, my generation (probably yours too, though we’ve never talked ages) is the first one to have to financially care for both their kids AND parents. So, if our parents were hit hard by some economic something, it’s possible that your normal finances will be threadbare – all the more reason to have something stashed away in case your kid falls in love with the idea of being a lawyer or a doctor. You don’t need to have this account stacked and churning, but having a launching point isn’t bad.

    I come from the school of “save SOMETHING,” even if it’s under your mattress. But even better, put something in a local credit union rather than a big bank, because at least then, you’re feeding the community, with the hopes that SOMETHING will get better with this economy someday. And hey, if you’ve got balls of steel, you can give your kid the best lesson of all – sit them down and teach them how to invest intelligently and play the market. Teach them about stocks (okay don’t teach them much about that crap), teach them about CDs and other investment accounts – and why timing is important. Teach them about credit cards and why the country’s in such a mess over loans. See what kind of decisions they’d make to stay financially-stable, and hone that into a smart spender.

    In any event – good piece and you make some good points. It’s definitely a complicated topic – and like you said – some of the people telling us to save are doing so with themselves in mind.

  4. Not to mention, the schools that will enrich thinkers and doers will also give scholarships for thinking and doing. I was offered full rides to 2 different colleges based entirely on 1) my writing portfolio and 2) interviews. By the time our kids are college age, I predict a huge shift in what colleges will be looking for, because we are starving for leaders and think-out-of-the-boxers.

  5. I’ve long since told my husband we shouldn’t stress that we can’t save for the kids’ college right now. Kids will value it more if they have to work for the money, even if it’s by earning scholarships. I’ll gladly help where we can if we can, but not at the expense of our own financial future.

    Besides, there are a lot of great jobs out there which don’t require a college education, plus my oldest is so far interested in being like me and starting her own business online. College is nice for that, but not an absolute requirement. If it gets too expensive, we’ll just look at informal ways to learn.

    I hate saying that, as I’ve always imagined my kids going to college, but I don’t want my life or theirs destroyed by debt because there went to college and have trouble with loans after. It’s a real problem some people I know are going through now.

  6. Jeff, this post is so right on, and very inspiring.

    After giving some careful consideration, I’ve decided what I’m going to tell my three kids about college:

    Don’t go.. not yet, anyway.

    Do everything *you* want to do first.

    Move into a house with your friends, build a recording studio, start a record label, record your music and press it into vinyl, run an all-ages venue and host concerts, form bands, tour across the entire U.S playing bars/coffee houses/furniture stores/colleges/arcades/living rooms, sleep on floors, go through spells of infighting, argue over who will pay for groceries/do the dishes/clean up puke/tell Dave he has to pay rent or move out/Help Dave move.

    When you are ready to go to college in 8 or so years, I will be there to help you in any way I can. Hopefully, by then you will have found most of yourself, and will have a very good idea what you want to do with your life and your career.

    Don’t do what so many of my friends and even my older brothers did, which is get a degree that you will never use, but will pay for forever.

    Also, don’t do what I did–that was *my* dream. Go find your own.

  7. Jeff, we see eye to eye on the idea of paying for college but for different reasons. Not to highjack your post, but on what page in the parenting manual did it say that I, after raising them for 18 years and supplying every possibly need they have, now need to have a 4 year trust fund waiting for them to go to any school of their choosing? Where?

    Spurred on by financial planners and ‘investment’ professionals parents are encouraged/guilted into ensuring they have a stash put away when the time comes. And at whose benefit? The kids, with a 56% drop out rate for first year students it’s a best a flip of the coin. So you’re the good parent and did what you needed to do. Little Johnny grows up heads to college, joins a fraternity, meets a girl, parties his ass off and decides 9 months later that college ‘isn’t for him’ or more likely he has it decided for him that college isn’t for him. Now what?

    I’m convinced and I’ve written about it that one of the worst things a parent can do is have a college fund waiting for them. Even at 9 and 7 my kids are already being told that I’ll help (where I can) but in no uncertain terms will I be footing the entire bill for them.

    At some point they are going to need to fend for themselves.

  8. I love it. And totally, yours is one of my reasons too although I didn’t go into it here. I agree 100% that handing a child everything on a silver spoon does them a greater disservice than putting their higher education on them and their ability to obtain scholarships, grants, or a job to help pay for it themselves. It is a marketing ploy, a money grab really, but I didn’t want to spew much of that here either and cloud my basic idea. But if you look at the ads, the way the college savings products are positioned it is absolutely meant for us as parents to feel as though this is expected of us and if we fail our children in this arena than it is an indication of our lacking as caregivers. I call bullshit on all of that. Thanks for expanding on this for me!

  9. I wholeheartedly disagree with not saving for college. I understand what you are saying and why but an 18 year-old who has traveled the world and done different things is still 18.

    There are benefits and experiences that you can’t get anywhere but in college and I am more than happy to help my children with that. It doesn’t mean that they are not going to have to help either.

    But it might be the difference between having to work full time and part time. I want them to be able to get good jobs and while college isn’t a guarantee of that it often is one of the things that helps push them over the edge.

  10. Jack, I’m not saying I wouldn’t help my kids with some of the costs when and if the time came that they wanted to attend college or some vocation type of school at 18 or later. But the simple, base argument I am making is that with X amount of money, I would choose 17+ years of adventure together over 1 (maybe) year of paid-for college classes. Like I say in the post, college isn’t going anywhere, ever, but the time to bond and experience the world in whatever ways you decide as parent & developing child will eventually evaporate.

  11. Excellent post Jeff. You’ve spurred me to talk about this on my own blog a bit more. While I’m all for saving and being smart with your money, I agree with your ideas wholeheartedly.

  12. Thanks, Kelly! I look forward to reading your expanded thoughts on the issue on your site!

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