Filed Under Doug Powers | Leave a Comment
Those of us with young kids may find this article in Money Magazine of interest.
Here’s the scenario: Dick and Shari Schwartz are 55 and 52 respectively. They have an 18-year-old son, Jake,Ã‚Â who recently graduated high school and now the college acceptances are rolling in. The bottom line?:
Here are the stark financial facts. Together, Dick, 55, and Shari, 52, earn $110,000 a year. So far they’ve saved less than $10,000 for Jake’s education ($4,000 in mutual funds in the parents’ names and $5,500 in a 529 account). Total annual expenses at his first choice, the University of Oregon at Eugene, will top $25,000. The shortfall over four years is an eye-popping $90,500.
Jake, the best I can do hereÃ‚Â is quote Judge Smails from Caddyshack, “Well, the world needs ditch diggers too.”
And this article leaves out a bunch of stuff. You’ve got book money, beer money, date money, movie money, possible bail money after a panty-raid gone bad. There are endless added expenses that easily drag any full time education at a four-year college into the six figure area.
Couple the expense of college with the devalued nature of the educations provided at certain Universities, and you start to wonder if you’re not better off taking that hundred grand and giving it to your kid in the form of a car, clothes,Ã‚Â and a huge pre-paid gas card. Half up front, and the other halfÃ‚Â upon delivery of a job. (if you’ve raised Junior properly, common sense does win out, even today)Ã‚Â
Which would be better? You,Ã‚Â A) give your son or daughterÃ‚Â $100,000 to put towardÃ‚Â a reliable car, new duds and gas money to go on interviews with plenty left over, or, B) SpendÃ‚Â $100,000 on their B.A. in Liberal Arts with a minor in Latvian Anthropology, and now you’re all broke and suddenly one of you is interning on Ted Kennedy’s re-election campaign while living in your basement and chastising you for mowing the lawn on Earth Day.
You make the call.
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