Kid Expenses

[Mjenn]

We don't live in the US so our expenses look a bit different but our approach has been the following:

University is free here, but we are saving incase our kids want to study in the US for longer than a year or two (often covered by free student exchange if just a part of studies). We save an amount each month with the intention that it be used for college, a downpayment on an apartment or the large event of their choice --- but it won't cover all 3. We keep the savings in our name because otherwise it would legally become theirs at 18 and as it is our money, we want to make sure it is going to something we think is worthwhile - (yes we are controlling like that). Chances are it won't be enough for 4 years of American college, but enough to mean they can take out fewer loans.

I had the privilage of not taking out any college loans mostly due to an inheritence I had, and I am incredibly grateful. I didn't get any money towards grad school --- but I got a full scholarship, and so I had no student debt. I don't expect my parents to pay for my downpayment, but they did contribute to my wedding at their request.

My kid goes to daycare, but that is subsidized here so it is peanuts really. And that cost will disappear when they reach school age.

So far, having kids has been rather inexpensive, but we did choose not to relocate to the US because we wanted to have a less stressful first few years with the kids... and trying to balance work and daycare costs and commutes and hours where we would live in the US was too much. Maybe head back in a few years, who knows?

I also save for retirement and have a strong EF and a good investment portfolio. I don't think we are sacrificing too much. I grew up in an area of the US where a lot of kids were 'taken care of' well into their 30s, but they didn't get all of that stuff--- maybe college and the wedding, but had to pay for grad school and downpayment. Or they could live at home for free and save up all of their money for a few years to help with downpayment.

[MonkeyMama]

Is it wrong to have kids and not provide college for them?

Of course not.

I think the point that is also often missed is that there is a lot more to "support" than money. I think my upbringing is the perfect example. I have some of the most supportive parents I have ever seen. Just not very free with the "money." Which I have absolutely no complaints about. The flip side is they gave me all the tools to succeed in life. A free car, a free degree and a free wedding were not needed for success.

I don't have too many preconceived notions about college (too many unknown factors that will affect our kids' choices and maybe sway their choices to be very different from our own - for very valid reasons). But, I am a stickler for one point: No one (us or kids) are going into debt up to their eyeballs for a college education.

Heck, this applies to everything. Same for a car or a wedding.

[dawnwes]

We plan to offer our children whatever the current tuition rate is at our local 4 year college. This would make college free if they choose to live at home and commute. If they plan to go anywhere else, they can have that amount from us and they will need to cover the difference.

So, it may cover 100% of their college, it will just depend on their choices.

Car: They can use one of our cars if they live at home. If they move, they will most likely have to fund their own car.

Wedding: We will most likely allocate a certain amount we will be willing to cover/spend.

House: I doubt it.

[siggy_freud]

It certainly isn't wrong. Do what you can - that's all you can do.

One thing I will point out though, to all of those who say, "I worked my way through school. My kid can do the same." Times have changed. The cost of college has risen way faster than inflation and way faster than wages. The school I graduated from in 1986 was 10K/year. It is now 45K/year. Incomes haven't gone up 4.5 times since then so "working your way through" isn't nearly as feasible as it once was. That's a big reason why student loan debt has skyrocketed. Income hasn't nearly kept pace with costs.

+1 to this.

I went to a state school, and it was still nearly 20k per year. I worked part-time throughout college, and depending on your major(s), even that is tough if you want to do well. No way I could have mustered through all my classes, and done a full-time job, and still have earned good grades.

The debt was inevitable, so I made my investment in the grades/education, rather than trying to dig myself out in advance by working more than I thought I could while in school.

Be cautious of "5 year" programs. Some of them are legitimate in that they have full loads every semester and STILL take five years, while others are a means to keep the student there for an extra year but purposely spacing required courses in such a way that the student ends up with a lighter load because it's impossible to meet all the pre-reqs in time to do things in 4 years. Some can still be accomplished in 4 years if the student is a good learner and aggressive about their class load.

[disneysteve]

Be cautious of "5 year" programs. Some of them are legitimate in that they have full loads every semester and STILL take five years, while others are a means to keep the student there for an extra year but purposely spacing required courses in such a way that the student ends up with a lighter load because it's impossible to meet all the pre-reqs in time to do things in 4 years. Some can still be accomplished in 4 years if the student is a good learner and aggressive about their class load.

Thanks for the warning but that isn't the case here. She is looking to do mechanical engineering and the school has an excellent (world renowned) co-op program with an extremely high (97%) job placement rate. Of the 5 years, 1 year is co-op time (not all at once but over the course of the 5 years). There is no tuition during the time the student is on co-op and they earn market wages for that work. No unpaid internships here. So she'll actually earn money that can be used toward her education during the course of her education.

[moneybags]

My choice to only have 2 children was based on the fact that I grew up in a large family with very little resources. There wasn't enough money for new shoes let alone college.

We just paid for the first semester of college. We are paying the majority of the expense for both children. They do have some financial responsibility, but it is minimal. I don't think there is a greater gift we can give our children. We have lived frugally in order to do so.

Weddings, cars, houses - they are not in our budget, but I am not opposed to helping if possible.

That said, if I really wanted 4 children and could afford them (minus the college, wedding, etc.), I would do it. There are ways to save money and options for more affordable college routes.

[sblatner]

Thanks for the warning but that isn't the case here. She is looking to do mechanical engineering and the school has an excellent (world renowned) co-op program with an extremely high (97%) job placement rate. Of the 5 years, 1 year is co-op time (not all at once but over the course of the 5 years). There is no tuition during the time the student is on co-op and they earn market wages for that work. No unpaid internships here. So she'll actually earn money that can be used toward her education during the course of her education.

DisneySteve, which school are you looking at? We have a senior applying now to engineering schools.

[disneysteve]

DisneySteve, which school are you looking at? We have a senior applying now to engineering schools.

The one we just visited was Rochester Institute of Technology.

[siggy_freud]

Thanks for the warning but that isn't the case here. She is looking to do mechanical engineering and the school has an excellent (world renowned) co-op program with an extremely high (97%) job placement rate. Of the 5 years, 1 year is co-op time (not all at once but over the course of the 5 years). There is no tuition during the time the student is on co-op and they earn market wages for that work. No unpaid internships here. So she'll actually earn money that can be used toward her education during the course of her education.

Sounds like a great program, and I figured a person like you would have done the research. Having recently (past 3 years) finished school, I just saw too many people going into "5 year" programs that really were 4 year endeavors. But creative scheduling by the school meant they'd have three required courses, that had pre-reqs but were only available every other year or something, such that they'd need to attend a 5th year, but only have to take 1-2 classes per term. To me that seemed low.

[marvholly]

I can only tell you what late DH & I did for our 2 girls:
Did public grade & high schools but live in an area of good (high taxes) schools
Car; we did always have an extra as DH was in outside sales so kid got to drive-this did GREATLY diminish auto insurance as it was OLD and we just had liability on it vs against our 2 y/o luxury car. We paid maintenance & license but they had to pay increased insurance.
College: we set up a maximum we could afford to pay based in instate costs for a MAX of 4 years –overage was on them PLUS we insisted they cover 25% so they had ‘skin’ in the game.
Grad School-TOTALLY on them (kids were 4 school years apart-only could pay 1 at a time). DD1 did 40k of loans, DD2 took 5 years on a pay as you go plan.
Weddings-Gave a SPECIFIC $ amount (plus cash gift later)-everything else was on them
House-TOTALLY on them BUT both kids got 5k tide over loans for the downpament due in 3-4 months or they would start accumulating interest.

At this point both my kids have kids. One has been buying state tuition vouchers. The other has a 529 plan.

[snafu]

We're in the thick of it with 2 sons in Canadian universities. We set up monthly contribution Mutual Funds for each when they were toddlers and also added any gifts of money. Recently,money from grandparents estate was added. By High School both knew they would be expected to pay tuition from earnings as 'skin in the game' since DH & I are too familiar with 'party players.' Both guys have had some type of part time work or entrepreneurial business since middle school I believe because they were paid for extra chores at home.

DS1 choose to live at home for 1st two years at local Community College since his general courses were totally transferable. He's now at an out-of-province university with a better rated Commerce faculty. DS 2 took only 1st year at Community College, local university, gap year travel and now back at university. Both work part time during terms and full time summers. So far, minimal draw from funds; we've paid their transportation cost. Both live cheap, DS2 is the only one at his house share that can cook so he makes meals and the other 5 sharers have waived his rent.

[TBH]

I am hoping to have enough money saved to pay for a bachelor's degree at a public university for my DS. If he wants to go somewhere more expensive, I will expect him to pay for at least part of it. If I am in great financial shape and he has good reasons for going to a specific private or out-of-state school, I'll probably try to help out beyond the cost of a public education. But that will depend on what my own finances look like when the time comes.

As for other big life events--house, car, having his first child, etc--I don't see it as my responsibility to save for those things now on top of saving for my own retirement and for his college. When the time comes, I hope I am in a strong financial position so I can give him a sizable gift when these life events come along. But I absolutely don't see it as my responsibility. My parents have helped me when they could, paying for part of my first car, etc. But when I've had big life events come along when they didn't have money to spare, they simply didn't offer any money.

[asmom]

My daughter is attending a pretty decent state college and we are paying her way. We also bought her a car because I was sick of driving back and forth to pick her up. Even with that, I've been able to continue to max my Roth and 403B as well as put a little to the side in a mutual fund. She has obliged us by getting a part-time job to pay for her other expenses, gas, cosmetics and grooming, clothing, toiletries and groceries, etc. She is going to have to pay for grad school on her own and I am certainly not buying her a house or a wedding. I think that's fair.

As for my son, I see community college in his future....


If you want to have a third child, I doubt it will put you in the poorhouse. People used to do it all the time before each kid had to his or her own bedroom complete with a flat screen TV, an Ipad and expensive (fill in the blank here) lessons. So they have to pay their own way for some things, it's not the end of the world. Adding to your family is a great gift to give yourself and your kids.

[asmom]

Here's another thought:

My paternal grandparents had 10 kids and my maternal grandparents had 16 kids. They were all poor but back then being poor wasn't a dirty word. That's just the way it was. They were never on welfare of course; they came from a generation where you worked for everything you had and if you didn't have the money, you just didn't get it. My parents and all my aunts and uncles graduated high school and most of them had vocational educations. All of them married and owned homes and were gainfully employed in their working lives. Nobody seems particularly bitter about having to make their own way in the world, that's just the way it was. In fact, during my grandmother's lifetimes, they were extremely cheerful people. Not one of my grandparents ever said, you know I wish I'd had fewer kids.

[elessar78]

In my own life:

College, mom and I split 60/40(me)
First car: she bought, I didn't ask for her to pay for it but on the day I was moving out she told me not to bother.
Wedding: she paid a good chunk of it.
Downpayment: she gave us the 20% downpayment. She offered for years, but I didn't want to but I finally relented this year.

My mom has been very generous with us, her kids. I think there's some guilt involved in that she got divorced when I was in my teens had to work a lot just to make ends meet. That's my armchair psychologist assessment of it.

Now she's financially secure. She retired and gets a generous pension, social security, and rental income. But she didn't like retirement so she works 6 months out of the year—so she still makes money and gets to enjoy retirement as well.

What about my kid? I plan on helping with college, not footing the whole bill. A reasonable contribution to the wedding. First car? I'll probably pony up for a reliable, safe vehicle which could be had for not a lot of $$.