Updated on 08.28.14

Children’s Education and Personal Finance

Trent Hamm

Is There an Overemphasis on College Savings?

Almost every time I read an article about funding your child’s education, it turns into a discussion about saving for college. Coverdell plans, 529 plans, how to handle the FAFSA – all of this stuff is standard personal finance fare. But all of it overlooks the first eighteen years of your child’s life – the period in which most of their education and learning will actually occur.

I watch my two year old right now and I see him learning all the time and building skills for the future. I have nieces and nephews ranging from age six to age fifteen and they’re all learning all kinds of things. Every single one of these children would benefit from some extra emphasis on their education right now.

Things to Consider Regarding Your Child’s Education

Overlooked Opportunities

There are countless opportunities to improve your child’s education and growth right now instead of further down the road. Here are some ways you can invest immediately in your child – figure out ones that work for you and try them.

High-Quality Day Care and Preschool

Put $20 less a week into college savings and instead get your child into a better child care opportunity. Paying for a preschool that can give your child educational growth opportunities is well worth the extra cash you put in.

The question of daycare or no daycare is one I’ve covered before. Some parents may find it better for one of them to stay at home with the children, at least until they’re in school – it depends on your situation. Either way, a top-notch preschool or great day care or a parent staying at home are all expensive.

Private School

When your child enters school, most likely you’ll send them to the local public school without skipping a beat, but you might want to consider rerouting some of that educational savings into the cost of private school. Private school is an issue I’ve discussed before as well – my take on it is that it depends wholly on the quality of the district you live in.

I’m lucky to live in one of the best school districts in one of the best educational states in the country – I live in Iowa and found out about the quality of my local district at IowaSchoolProfiles.com. Thus, the benefit my child would get from private school versus public school is much less than the benefit that would be found by a student in a poor public school district.

If your choice is between putting your child in a poor public school district and saving $8,000 a year for college, or paying $8,000 a year for private school tuition, you might want to strongly consider the latter. It will set your child up to succeed later on with better test scores and a stronger education before they even get to their standardized tests.

Educational Opportunities

Several times during my school years, I had opportunities for educational growth that I was unable to take advantage of because of the cost. There would be $200 or $500 or $1,000 fees involved and my parents were simply unable to help with those costs, and so I missed out on things like taking advanced coursework, traveling around my state to speak, helping with at least two large national conventions, and other opportunities. Perhaps most painfully, I missed out on an opportunity to participate in a summer program at a technical institute in Germany for advanced math students – I really wanted to go to this and even applied without my parents’ permission, but there simply wasn’t enough money. I still remember throwing away that acceptance letter without telling anyone about it.

Having the money available to give your children great educational opportunities, especially in junior high and high school, can transform a good student into a great one, fueling their passions and letting them explore the world.


I’ve found that the opportunity to travel has taught me so much about the world – and so much about myself. Even just traveling within America, I’ve witnessed an incredible amount of diversity: different lifestyles, different foods, different cultures, different people, and so on. When you go international, your mind spreads even further and you begin to realize how much diversity and how many opportunities there really are out there.

My childhood never exposed me to such diversity, unfortunately, and that caused a pretty steep learning curve when it came to interacting with and understanding people from different cultures later on in life. Luckily, I had a number of friends from different cultures who were very understanding, particularly a group of Chinese students who “got” that I was just clueless, not hurtful, and if I said something completely wrong, it was borne of misunderstanding.

I’d rather my children be exposed to the diversity of the world much earlier than that, and to do that we’re going to travel significantly in the future. I plan on lengthy trips to international locations, particularly with the goal of spending most of the time off of the beaten path.

Exploration of Interests

When I was in school, there was one child that was oozing with natural musical talent. He’d do stuff like drum out complex rhythms with his finger on the table, he could sing quite well, and during music class, he intuitively began to pick up the piano in just a few minutes. When he was asked to join the band, however, he declined. Why? I later found out it was because he knew his parents couldn’t afford the instrument.

That’s not a situation that I’m ever going to allow my child to have to live through. There will be money for them to explore their interests, whether it’s music or physics or chemistry or engineering. If they start showing passion for something and growing in that direction, we will support that growth.

Benefits of an Earlier Emphasis on Educational Spending

All of the above are educational costs that sometimes get overlooked in the rush to save for college, but they can all set the table for your child to do very well academically and personally. Here are a few benefits of pointing at least some of your educational savings in the direction of helping them grow earlier on.

are the direct result of many positive childhood factors: travel, music, a better school, and a better preschool all contribute directly to improved test scores later on. Those test scores can help your child win scholarships, get into a better school, and line things up so that they can chase their dreams.

Improved problem-solving skills and self-reliance are also the result of good activities, particularly those that are self-directed. Educational opportunities where your child can take the lead and really get excited are worth their weight in gold – not only do they learn material, but they learn life skills, too.

Discovery of passions and interests early can also help the child figure out what they want to do with their life so they don’t make bad (read: expensive) educational choices in college. Going into college without a clue about what you’re doing has a huge cost – it can tack years onto the college experience and can often result in people being unhappy with their careers and going back to school. Helping your child discover their passions earlier on can really help, and you can only do that by fueling their interests and personal growth.

Think Different: Start a Separate Education Fund

My wife and I have a solution to this problem. We’re starting a separate “education fund” for each of our children and putting a bit each month into this fund, almost as much as we’re putting into their college 529s. Later on, when opportunities for them come up, we’ll use this money to pay for it – they’ll never lack in terms of being able to take an educational trip or explore a new area of intellectual interest.

We view this as an investment in them, just as a college savings plan is, but it’s one that will bear fruit sooner and it’s one that we’ll use throughout their childhood, not just when they’re leaving the nest. In the end, we believe this strategy will help them become better adults than just funding their college education will be.

What kind of investment?

For now, the fund is merely a savings account for each of them. Eventually, we may consider other investments, but they’re likely to be rather conservative – the riskiest move we would make would be to buy a broad-based index fund.

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  1. Miranda says:

    This a great post! While it is important to teach children to save up for college, there is no reason that they need to have parents pay for it all. I agree that children need to be able to explore their interests and develop a love of learning throughout their lives. A little bit now, for extra-curricular activities and better education, can actually put them in a better place for scholarships — free college!

    There are other options as well, when it comes to activities. Look around and see what resources the community has to offer. I was able to be a foreign exchange student by going through 4-H. There were fundraising opportunities and scholarships to help kids pay for the program.

    In high school, when I wanted to learn saxophone for the jazz band, my mom rented the sax, since she couldn’t afford to buy me another instrument (I already had a clarinet). Many school districts rent out instruments, and it costs much less than buying them.

    A little planning ahead — and some creativity — can provide the funds for extracurricular activities.

  2. While I agree that travel and high quality preschool is important for kids, I absolutely disagree that private school should be emphasized as an alternative to spend money on college. College is growing astronomically expensive, while I am lucky that my college fund covered my four years at a state school (I graduated one year ago) I have so many friends just loaded with student loans. If they were lucky enough to get state loans or scholarships, they’re in better shape, but if they got stuck with private loans, they have high interest rates. I think private school in elementary/middle/high school is totally overrated. I went to an excellent public high school in Houston and wouldn’t have changed that for the world. If my parents had spend the money for me to go to a private high school but left me with half the money I had for college, I’d be furious. If you live in an area with a horrible public school, move somewhere else. College funding is NOT overrated. Even the costs of state schools are going up and up, and public schools cost a FORTUNE. Then, if you kid wants to join a Greek organization, that’s several more thousand each year. Sure, it’s nice to know your kid is at an extra-special daycare center, but believe me, as a recent collge grad, I can tell you I am SO grateful my parents lived modestly as I grew up, which allowed me to leave college debt free. Kids can still explore interests without parents having to fork over tons of money. The kid whose parents couldn’t afford an instrument — they didn’t have to buy one. Plenty of places rent instruments. Or they could have gotten a gently used one on eBay. Many community centers offer free activities. I just think there are many alternatives to the things you suggest.

  3. Jon says:

    “Put $20 less a week into college savings and instead get your child into a better child care opportunity. Paying for a preschool that can give your child educational growth opportunities is well worth the extra cash you put in.”

    Wait, so better child care only costs $20 more a week? I don’t have kids but I find it hard to believe there is a substantial jump in child care quality for the cost of $20 a week.

  4. Johanna says:

    I’m not so sure that spending a lot of money on a child’s pre-college education necessarily makes it more likely that they’ll get a scholarship later. In fact, it may even have the opposite effect.

    Why? Because it’s much easier for truly exceptional students (and that’s who merit-based scholarships are aimed at, after all) to distinguish themselves when they don’t have every opportunity handed to them on a silver platter.

    If you join your school’s chess team, that looks only so-so to a college admissions officer. But if your school doesn’t have a chess team, and you take the initiative to start one, that looks much better. If you take every advanced placement class that your school offers, that’s a good achievement. But if your school doesn’t offer a lot of advanced placement classes, and you learn the material on your own and take the tests anyway, that’s really fantastic.

    I speak from experience here. I had a scholarship to college (which I honestly don’t think I would have gotten if I’d gone to a posh private school instead of a middle-of-the-road public one, but that’s a long story), and for three years I served on the committee that selected future scholarship recipients. We saw a lot of kids whose parents had obviously paid for them to have every opportunity that money could buy, but the ones that really stood out were the ones who had made their own opportunities.

    Anyway, there are ways to support and be involved with a child’s education without spending a lot of money. And whether they get that scholarship or not, they’ll certainly be grateful to have the extra money available to start their young life.

  5. KellyB says:

    Fantastic post! Way to “think outside the box” on this subject. I’m sure you’re not planning to fund every little thing that comes along, but for those rare and interesting life opportunities, you’ll be ahead of the game having the finances in place to be ready to take them on.

  6. Anitra says:

    These are great ideas; looking back, I can see that my parents did a lot of these for me. (Most notably, they had intended to send me to public school, but when the public school refused to take me “early”, they thought it was important enough to send me to private school instead.)

    Don’t forget, though, that the #1 investment you can make in your child’s education is TIME and ATTENTION. Even though I went to a private school, my parents took time to sit down with me and teach me things I wasn’t learning in school (physics, how to proofread a paper, even beginning algebra when I was only in 3rd grade). We never took expensive vacations, but when we did travel, my parents were always on the lookout for learning experiences, whether it was Howe Caverns or the Boston Freedom Trail.

  7. Sheila says:

    Brilliant!! (Applause)

    I live in the lowest of the low states as far as education goes. Our state (SC) has a state ‘education’ lottery, which is meant to help defer college cost. The problem was that, as soon as the lottery was approved, tuition jumped. And no lottery money is earmarked for elementary or secondary school.

    If a child does not learn to read because his school can’t afford a textbook for all the children in the class (a situation that happens here), what possible good is a college-lottery?

    Luckily, I’m in a position to look at the public school system here as a good foundation for my daughter and we are filling in any gaps as they arise.

  8. John F says:

    Here’s another idea for a post: Where do spoiled kids and entitled people come from?

    My background is fairly humble. My parents owned a small hardware store in the mid-Hudson Valley, and we never really had much money, especially when I was in middle school and the business got shut down and they had to start over (long story). My brother and I ended up going to top colleges almost entirely on merit and need based financial aid mixed with a moderate amount of loans, and now have good jobs, him as a physics researcher/professor and I in finance.

    All through my life I’ve run into peers that were spoiled rotten, had no concept of money or belongings, no sense of responsibility for their actions, and had a general sense of their own entitlement to everything. This generally (though of course not always) went along with their parents having plenty of money.

    Now I’m saving aggressively and hope to be in as solid and free a financial position as I possibly can be by the time I start considering children. I want my children to be able to take advantage of opportunities that come their way. But I have to admit that I’m deathly afraid that they’ll turn out just like those peers of mine that I simply couldn’t stand when I was younger (or now).

    I guess my question, is what causes so many rich kids to turn out rotten, and how is it that some still turn out all right? Can a child be given all the opportunities in the world and still be able to appreciate them?

  9. Norman MIller says:

    “Is There an Overemphasis on College Savings When Discussing Children’s Education and Personal Finance?”

    No! No there isn’t an over emphasis. In fact, there is a real lack of emphasis.

    For all of the talk of debt on this blog I can’t even believe this question would come up.

    With terms on college loans being extended to the point of being mortgages how can anyone in good conscience ask this question.

    My kids will graduate college without debt.

    As for “Earlier Emphasis on Educational Spending”, that is part of the cost of raising kids.

    We are vacationing on the Outer Banks of North Carolina? Why? To learn about the Wright Brothers, the Lost Colony, and to have fun at the beach. Again, just part of the cost of parenting.

    The kids play tennis and swim for sports. They take ballet and theater classes for arts. Again, part of the cost of parenting.

    My wife owns a daycare center so I have that covered too, but private school. I call private school working one on one with my kids every night for an hour each. I call private school teaching my oldest daughter to play piano on Sunday morning.

    It is an enormous responsibility being a parent.

    “Is There an Overemphasis on College Savings When Discussing Children’s Education and Personal Finance?”

    No! No there isn’t an over emphasis. In fact, there is a real lack of emphasis.

    Don’t overlook or allow yourself to believe you can disregard college savings.

  10. Andy says:

    This is just looking at one aspect of the article, but I would wait to send your kids abroad. I just don’t think I would have appreciated it as much if I had done it younger. I went to Italy for a week and a half when I graduated high school, and then two years later I was back in Italy, and this past summer in Greece (on archaeological digs). Even those couple years really helped me appreciate the experience more.

    I think younger kids are just more concerned with being cool, having friends, etc. While I agree that it is important to let them experience things, international travel is so amazing and so expensive that I think it is best left until later.

  11. imelda says:

    Does private school really cost $8,000 per YEAR where you are? Jesus christ. You know, suddenly that old government program to hand out $2,000 vouchers for private school education makes a lot more sense (though it was still a stupid idea). Even private pre-schools in NYC can cost upwards of $20,000 per year.

    I don’t have kids, but this was a really interesting article. It reminds me a bit of Tim Ferris’ book, The 4-Hour Workweek, where is premise is not to save all your money and interests for retirement, and to enjoy life now! I think it’s a similar concept.

  12. Sharon says:

    I would love to hear from someone who has done research on this topic.

  13. MVP says:

    The single best educational opportunity you can give your child is your time. By that I mean one parent staying home with them as infants and toddlers and being home for them in the morning before school and when school gets out – until they’re not in school anymore. The teen years are perhaps the most important when it comes to parental guidance.

    Also, my experience as a high school foreign exchange student transformed and molded my life. My parents really had to stretch financially to send me there, and I had to pay part of the costs myself, but I’m so glad we did it. I got a vast education in life, different cultures, history and language.

    A part-time job can also be an valuable source of education for young people. I had jobs all through high school and learned volumes about my personal strengths, weaknesses, interests and how to relate to others, which helped prepare me for later life.

  14. Curt says:

    I agree with you 100%. I have read that a child learns 90% of what they will ever know before they are 6 years old. That’s why pre-school is a good idea. In fact, a stay at home parent is an even better idea and homeschooling is the best way to get your child a jump on education. Saving for college, while skipping early opportunities does not make sense. Of course, if you have enough money, you can do both.

  15. tanya says:

    I actually think that when reading alot of these financial blogs there is just too much emphasis on funding our kids education. Yes – it nice to help some. But I don’t think it is a requirement to foot the bill totally.

    And I do agree with you…it would have been nice if I could have done some of the extra “stuff” in high school that my parents did not have the money to cover.

    In my college experience – my parents covered my rent. I covered college tuition/insurance and spending money/food/car. Spending money I earned via working while in school..tuition was thru a student loan. I paid it off myself.

    If everyone goes down the path of completely funding their kids education – they will not value what they are given and they will just have to learn what we are learning now – living within a budget.

    My 2 cents.

  16. Jennifer Thompson says:

    Yes, $20 can make a difference in child care opportunity. I was sending my kids to a great church based child care center. Not trendy, but education based and reflected my values. Also on the low side in costs, as it was somewhat subsidized by the church.
    My co-worker though sent her children to a woman working out of her home. She was complaining about a problem she had there and I suggested my child care service as an alternate. The price difference was only $20 a week, but that extra $100-$120 a month, she just nearly choked on it. Same woman went to Hawaii on her honeymoon a year later… so she certainly had some leeway in her choices.

  17. Beth says:

    I think it’s a great idea to set aside money now to use to help fund opportunities for your kids as they get older. I imagine, though you didn’t say, that you’ll encourage/require the child to do something to pay for these trips as well.

    I think putting in their own work and effort will help them appreciate the experience more – and if it’s not worth it to them to pick up a lawn mowing gig to help fund a trip to DC, it probably won’t be worth your long-saved dollars either. You didn’t have a silver platter, and hopefully your kids won’t either.

  18. Borealis says:

    This is one of your best ideas and very original. Please incorporate this into any books or further writing you do.

    This is the perfect example of penny-wise, dollar-foolish, budgeting.

  19. Lauren says:

    I think it’s rather simplistic to make a connection between money and how “rotten” a kid is. I’ve known and seen plenty of “rotten” kids who came from poor and middle class families. True, having money can seriously magnify the problem, but the money itself is not the problem. It seems as though much more of the blame lies with the parents, who have no idea how to raise responsible, thoughtful members of society and frankly don’t really care. Adding money to the mix just makes it worse. I’m sure there’s kids from wealthy families out there who are decent non-“rotten” kids, but I guess the bad apples are a lot easier to focus on.

  20. Jay says:

    With two kids in college I say “yes, yes, yes”. Take care of those first 18 years, and the rest will follow.
    I would suggest if there’s enough money floating around for private school tuition, maybe one parent can bite the bullet and stay home. Unless you’ve done it, you have no idea what a huge difference it makes in a child’s life. I wish more families would re-examine their lifestyles and make this choice. BTW, even if a parent stays home, having your kids go to an excellent preschool is money well spent.
    As MVP said time is the greatest [gift] you can give your children.
    Travel, live life, make memories.
    Fully fund a Roth IRA (can tap it in a pinch) before Coverdells; grandparents/parents do NOT put assets in the childrens’ names; pay down your mortgage, etc. Completely take care of your own financial house before putting a penny in a “college fund”. FAFSA might think you’re needy, but you will know better! Oh, and parents can take out loans for their kid’s college education, too. If your “house” is in order, this won’t be a burden.
    Just my 2¢.

  21. Looby says:

    I’m going to have to disagree with Andy about waiting to travel. If you can afford to take your children on trips- do it.
    I was very fortunate that my parents put an emphasis on travel, over things. By the time I was 15 I had been to 5 continents, had practiced the languages I was learning in school in real life situations and had experienced amazingly different cultures and foods.
    I’m so glad I had these opportunities and don’t think they were wasted on me at all.

  22. Sarah says:

    I’ve never replied to one of your posts before, despite being a longtime reader, but this is a really excellent take on the issue. My husband and I both teach middle school, and you’re very right in saying that all the really important learning happens before age 18. I won’t echo everything you said point-by-point, but I agree with you 200% on this post!

  23. Mark B. says:

    Absolutely brilliant post. One of your most original and intuitive posts yet.

    My children are currently 2 and 1. We are flat broke paying for the best day care in the area, but it is worth every penny to watch them grow and learn everyday.

  24. Shari C. says:

    As the mother of two teenagers, I wanted to weigh in. I have homeschooled our children from the beginning. Yes, it has been a sacrifice financially, but we wouldn’t change a thing. It has been a huge blessing to watch our children be able to pursue a passion for learning, not be slaves to peer pressure and enjoy traveling (although not abroad) all while working hard. We have spent just a few hundred dollars a year for educational curriculum and lots of time on the internet and at libraries. Both of our children have held jobs from a young age (i.e. babysitting, lawn mowing, etc.) They understand responsibility and commitment and about being a part of a family. They are also expected to work hard academically and to work around the house doing chores.
    I am happy to report, that they are both well adjusted, happy, smart teens with a love of learning. They are avid readers and are great savers. Our 17 year old son will be graduating one year early this month from high school, with enough college credits to be enrolled full-time as a sophomore next year at NIU. He did receive two academic scholarships to pay his way for his grades and his ACT score of 31. He just paid $4000 cash for his first car-money he saved himself. He works 30 hours a week currently and is picking up a second job for the summer to help with incidental college expenses. By the way he has high functioning autism, and has overcome to accomplish all this.
    Our 15 year old daughter is set to graduate early as well in two years and she already has 9 college credit hours completed. She has a full-time nanny job for the summer and they both volunteer regularly in the community.

  25. Alexandra says:

    Private school costs a lot more than $8000 where we live. Parochial school is cheap ($4000), but a regular private school costs about $18000 to $25,000 for a private school. And mind you, that’s a DAY school. Boarding school is about $40,000. I have good friends that are sending their kids to private school for all 12 years. They are crushed with debt, but they feel it’s worth it.

  26. Annie says:

    The best investment is free: invest time in helping them to develop good character. This helps avoid the rich avoid being spoiled, and it helps those with little money learn to make opportunities for themselves. When free will is taken into account, there are no guarantees, but a well formed character will serve a person for a lifetime.

  27. Saving Freak says:

    I wish more people would look at home schooling. If you can afford for one parent to stay home this really is the best option. Home schoolers are dominating the educational world in the U.S. and the kids have a real love for learning as a reasult of good home schooling.

    I have seen the difference between the experience of my nieces and nephews that are home schooled and those that are not. And that difference is a love of learning. The public and even private school systems are not adequate at allowing students to love learning. Either you fit their mold or you do not. If you do not you lose out.

  28. getagrip says:

    Let’s see, ballpark cost of college in twenty years, let’s say $200,000 for a state school to include room and board.

    Taking the kid on family outings and vacations, renting an instrument and lessons, some extracurricular activities, probably add up to a few thousand a year for the child’s share, probably more expensive as they get to high school. If you’re spending more, you’re paying for college already.

    Regardless, I think having that big chunk staring you in the face like a looming Hindenberg style balloon payment explains the emphasis on college savings.

    I also agree with a number of earlier posters that most families spend time doing things which will hopefully enrich their children’s lives in any case. Band, orchestra, choras, plays, summer camps, vacation, scouts, organized sports, 4H, etc.

    The biggest issue isn’t that the kids aren’t getting “enriched”, it’s trying to ensure they aren’t getting “engorged” to the point where they have no time for themselves.

  29. Dawn says:

    @Saving Freak – I don’t think that homeschooling is necessarily the answer (just like I don’t think that having money as a kid equals being a rotten brat later on). In my opinion, what makes a difference with kids is how involved the parents are. Even parents who stay home can be detached from their children. Parenting is hard work and you really have to be present for your kids every day to ensure they grow into the best possible versions of themselves. At any rate, leaving aside any arguments about the merits of homeschooling (or your assertion that homeschoolers are dominating the educational world in the US), there is no magic bullet. Perhaps in your experience, home schooled kids have a greater love of learning, but plenty of kids who go to public or private schools also have a love of learning and plenty of schools (and teachers) do their best to ensure that all children get the opportunity to discover their love of learning.

  30. oneup says:

    @Norman MIller

    I love your thinking and send kudos to you for your bold forecast, “My kids will graduate college without debt.”

    But you’re surely behind the curve. For one thing, college today is the high school of yesterday. So, graduating high school “without debt” is yesterday’s goal.

    More importantly, I’m surprised you’re settling for “debt-free” with your kids. Frankly, you’re aiming too low.

    My goal, radical to some, is to have my kids graduate “debt-negative”. Yes, I aim to turn a profit from their educational experiences!

    It won’t be easy for them, but the opportunity to pay for school AND pay me a parental bounty will surely be character-building. For both of us ;-)

    So, please raise your standards according (and get a sense of humor. Your earnestness is comical!)

  31. Greener Pastures: Responsible Personal Finance says:

    I agree, early education is so important. I’ve always given savings bonds rather than “stuff” gifts to my nieces as they were growing up. They can be cashed in if needed, at the parents discretion, or saved for the future.


  32. Pamela Gustafson says:

    I am not a big fan of preschool, especially if they are into academic tasks such as worksheets and teaching reading early. Parents who sing and read to their kids to just as well in kindergarten. Background knowledge is very important to reading, children have to have information in their heads to connect with what they read. It is called comprehension. I did not send my two kids to preschool and they were both extremely successful readers and students. As far as college is concerned I saved for two years and when that money was gone I took a part time job to fund the rest of it. I don’t want my children starting life with enourmous debt like many students.

  33. Jules says:

    I have to disagree with your idea that college savings is overemphasized. College is enormously expensive these days, and getting into a good college and graduating from it will determine your career options for the rest of your life. Yes, there are exceptions to the rule–Bill Gates, Steve Jobs, and all the other multimillionaires who never went to college. But far more people suffer from not having gone to college (in that their career choices are limited) or not having the proper degrees, than those that buck the trend.

  34. Roman says:

    It is never to early to start thinking about education and how you will pay for it. College isn’t cheap and sorry to say city colleges don’t make the cut! In my experience the money that you spend on school is well worth it. Start thinking about how and let your kids pick where.

  35. You missed one other way saving money might benefit a child’s education right now. First my disclaimer, I don’t want to start a benefits debate or make anyone upset by saying this – this works for me it may not work for you.

    There are many educational benefits for children when their Mom is at home with them. Saving money can make that possible.

  36. Pam Grundy says:

    Great post! I would add that if you have a professional skill, including your child in some of what you are doing and passing that on can be invaluable. Kids do what we do more than what we say. If your kid shows an interest, feed it and he or she may be able to support you in your old age!

  37. Curt says:

    @Saving Freak – Your right, homeschooling is perhaps the best option. And if you really look at the finances in the long run, you are better off. If fact, I have had so many discussions about the financial advantages of homeschooling – that I wrote an e-book about it. Just Google for “Save Money Homeschooling” and you will find it.

    There are lots of financial advantages to homeschooling, but perhaps the largest is when your child gets a full academic scholarship worth $250k compared to the working parent that has saved $50k in their college saving fund. Each child can save your family $200k. I realize this may not work out for every child, but if you plan for it, it is very possible.

  38. Jay says:

    Saying it’s”never too early” to save for college and that life’s choices are determined by whether you get into a quality school totally miss the point, and reflect, I suspect, you haven’t dealt recently with college [admissions].
    Firstly, you can stockpile a fortune, but if your child cannot/is not ready for a big bucks school, you are REALLY wasting your money. Colleges are extremely competitive, and your financial status will have NOTHING, NOTHING to do with your child being admitted.
    I suspect, too, that unless you’re really, really wealthy, somewhere along the line money will need to be borrowed. SO WHAT!! Are you prepared to give up time with your kids on that gamble [that you will have saved enough funds]?
    I’ve seen too many examples of early burn out, rebellion, anger from kids who are sick and tired of their parents’ obsession with getting into the “best” school and with their parents’ whining about how they sacrificed for their kids.
    *If you can’t afford an Ivy, so what? Even if all you can afford is a city college, go for it. Every 4 year school in the country accepts transfers, and your degree will be from the 4 year school, not the city college.
    *No one can guarantee who will get need-based or merit-based scholarships. If you claim to have the magic formula, aside from hard work, you’re selling snake oil.
    *Undergraduate and graduate schools know all about US high schools and their fellow colleges. They’ll know if a student has taken advantage of their school.
    *Within 5 years of entering the work force, anyone who cares will be looking at the student’s work history & character, NOT what school they went to!

    Pinning all your hopes on your child getting a “good” education is fraught with disaster. Relax! If your child is qualified, they will get into a college and will be just fine. They’ll be better off if you’ve brought them up content , self motivated, and ready for the real world. It’s your child’s responsibility to decide IF, when, where, and how he will pursue post secondary education. It’s your job to prepare him emotionally and psychologically for adult life.
    So, take care of your own financial well being, then BE THERE for your kids.

  39. This is a great comprehensive discussion on education. I have to tip my hat to you for covering all the bases. As one of your commentators have mentioned, if only more of us can relax with regards to this topic. I see way too many parents feeling anxious — or worse, guilty — about the educational path they’re putting their children on. If they are unable to afford the best, they panic. Yep, we need to relax more.

  40. Eric says:

    Well said !

    Since this is a personal finance blog, I’ll add a couple of notes in that regard:

    529 plans often save state sales tax, but I have yet to find one where fund fees do not exceed the tax benefit by the time the money is to be used. They also have limited investment choice. In short, they suffer from the ills of many a corrupt 401(k) plan available though the workplace.

    Saving for education is penalized by FASFA. Retirement savings and home equity are in general sheltered.

  41. Vera says:

    Echoing what others have said: Wonderful post. So different — and so much more sensible — than anything else I’ve ever seen on this topic. Hope you will incorporate this into your book. In the meantime, thanks so much for the blog.

  42. Mia says:

    “Improved test scores are the direct result of many positive childhood factors: travel, music, a better school, and a better preschool all contribute directly to improved test scores later on.”

    Where did you get this information? What does traveling or music lessons have to do with better test scores? Aren’t they (all schools) supposed to be teaching kids what they need to know in class? Some schools even give kids classes on test taking – so are “test scores” really an accurate measure of what one actually knows? Besides, I would think that being well-read would help with test scores more than traveling to Greece or learning to play the saxophone. You could do that with a library card – which is free. Not that traveling to Greece or playing an instrument arent good things. I just don’t think they are necessary for a child’s academic success.

    Also, I thought that the children who got the most benefit from preschool were those from economically disadvantaged situations – hence, the Head Start program. Since when did they apply it across the board to every single child? I don’t care what this or that study may say, there were plenty of brain surgeons, math professors and scientists before the invention of preschool. To say that preschool has anything to do with a child’s success as an adult is really a stretch, in my opinion as a mother of 3.

    As far as any benefits of preschool or early introduction to academics is concerned, there have been plenty who disagree with this, including the late Dr. Raymond C. Moore: “Better Late Than Early: A New Approach to Your Child’s Education” (look it up on Amazon) and this extremely interesting article on Trivium Pursuit’s web site:
    http://www.triviumpursuit.com/articles/ (scroll down to “Research on the Teaching of Math”).

    From what I have read (you can Google “parental involvement child’s academic success” for yourself) parental involvement is an important factor in a child’s academic success, if not the most important factor.

    “Improved problem-solving skills and self-reliance are also the result of good activities, particularly those that are self-directed.”

    Again, where did you get this information and what exactly do you mean by “good activities” that are “self directed”? Do you mean getting a summer job as a teenager or doing volunteer work? How about a younger child being taught to make their bed, wash the dishes and measure ingredients for a recipe? Most problem solving skills and self-reliance develops from living life every day and being taught these things by your parents. Self-reliance is a character trait – not an academic concept – and I doubt this can be taught by any one paid-for class or activity. Problem solving skills are taught every day at home, in math class, at the after-school job, etc. IMO, no textbook or class or single activity could teach this either. You don’t need to raid the college fund in order for your child to learn these things.

    I see these expensive summer day camps advertising now that keep kids running in an endless flurry of activity, and parents who think little Betty or Joe will become a prima ballerina or scientist because of these experiences gladly shell out the moola. Realistically, what are the chances their dreams (the parents’ dreams, not the children’s dreams) will be realized? It probably happens about as often as someone makes it big in showbusiness, or as often as someone wins the lottery.

    Stressing the importance of academics is important – at the right time. However, we can’t measure the success or failure of our children based on what college they get in to or what they do for a living. If we’ve done our jobs as parents, we have prepared them for life – whatever situation they find themselves in. I would be more concerned that my children be of good character than get into Harvard. The worth of a child doesn’t lie in their academic achievements or their chosen career path.

    Finally, I just refuse to believe that not being able to buy a musical instrument stifled the career of a great musician. I just don’t buy it. If the guy really wanted to play the instrument, he would have sought help from the band instructor. Or he could have gotten a job after school and paid for it himself. That’s part of learning “problem solving skills”, I suppose. You know, “Necessity is the mother of invention” and all that jazz? At any rate, what’s stopping him from pursuing his musical career now?


  43. Eric says:


    There is a lot of truth in what you write. The Finland experience as I understand it encourages play for young children, and ‘school’ begins from age seven. One interesting finding is that almost all Finnish kids read fluently before they start school without any parental involvment. Apparently the kids are motivated to learn to read by themselves in order to read the finnish subtitling of english language TV.

    My wife and I sent our kids to pre-school and elementary school for socialization, not for so-called academic achievement.

  44. KC says:

    Where I live public education is not an alternative. I’m looking at $15k+/year per child for private education. But since public schools are so bad the private schools are actually some of the best in the country. I also live in a state with no income tax. So I figure the money I save in income tax coupled with the benefits of a fantastic private education may actually be well-worth the costs of tuition. This isn’t the case everywhere though and I’m a big proponent of public education (I have never attended a private school and have 2 graduate degrees) but it doesn’t work everywhere.

    I think we all have to find the right mix for our child (and each child’s needs are different), our financial situation and the area we live in.

  45. Rachel says:

    It is very easy to say that you WILL do these things, but none of us know what the future holds for us or our children. Sometimes we have to say no, we cannot afford that band instrument, or you will have to pay for it yourself. I walked into marriage and parenthood with a fantasy of what life would be like. I soon realized that I cannot do it all, and I shouldn’t have to. Trent, if you do not put some things in the hands of God, you will never know how marvelous His provision can be! I am not saying be blind to your finances. It is important to save, spend wisely, provide for your family, but take it easy on yourself by not feeling that it ALL rides on you. Some times God wants us to be humble, to see Him work through others.

  46. Rob in Madrid says:

    Wow, I don’t have kids and I found the discussion to be fascinating.

  47. Lesleyann says:

    Hi — I have enjoyed this discussion very much, it is great to see how other people think.

    I have a question about the boy with the band instrument.

    He FELT like he would be burdening his parents if he wanted to play, he FELT like they couldn’t afford it. My take anyway — he wanted to spare their feelings.

    I think kids can feel like this when there are fights over money, when there are sighs when something comes home from school with a cost.

    Can kids feel like this from just a frugal attitude from their parents? If so, what is the best way to prevent this? Some kind of discussion?

    Yours, Lesleyann

  48. NP says:

    Well, I am still selfish and will continue to work and send my kids to public school (I teach public school too). I haven’t saved at all for their educations, but I am saving for my retirement. I don’t remember the constitutional amendment that said parents have to fund a college education. I intend for my children to get the HOPE grant (GA’s lottery funded scholarship for all) to pay for their undergraduate degree. I will still be working and paying as I go for what they need after that. My children will be expected to work while attending college. There might even be some debt accumulation due to the expense of education, but if I pay for it all, I don’t think they will appreciate the expense and sacrifice needed to get a college education.

    I do a lot of what Trent advocates and I think it makes my kids a cut above their peers: reading aloud, travel, scouts, church activities, sports. Also I’ve striven to be sure my kids are in gifted programs and advanced classes.

    They will be expected to take AP in high school, which could qualify for college credit if they pass the tests. I am also encouraging my kids to attend community college for at least their freshman year to save money and get support for their first year.

  49. KellyKelly says:


    You wrote,
    “He FELT like he would be burdening his parents if he wanted to play, he FELT like they couldn’t afford it. My take anyway — he wanted to spare their feelings.

    I think kids can feel like this when there are fights over money, when there are sighs when something comes home from school with a cost.

    Can kids feel like this from just a frugal attitude from their parents? If so, what is the best way to prevent this? Some kind of discussion?”

    Great question. I always felt like a burden for my parents because money was always so, so tight.

    I get SO angry when people say that “Love it all a child needs.” What an oversimplified and dangerous attitude.

    I am certain that my parents loved me and my siblings. However, that emotion could not defeat the extreme money stress they felt, trying to provide for us.

    To this day it is hard for me to buy anything for myself — even the necessities, like getting repairs done to my SINK. I am not talking about the 10th pair of shoes. I am talking about being able to use the faucet.

    I wish there was more candid discussion about this.

  50. @ NP:
    I disagree that students will not appreciate the expense and sacrifice of a college education if they don’t have to pay for it. I hardly had to pay for anything for college, but I worked several of the years just because I wanted to earn some of my own money. I knew how much everything cost and was incredibly grateful my parents had given me the opportunity to enter the workforce without crippling debt.

    Several decades ago, when college was not a necessity, I don’t think parents should have been expected to save for college. Now that college is almost 100% necessary to succeed (a lot of businesses now prefer employees with grad degrees), I think it is almost irresponsible to have kids but to not save any for college. My dad earned a nice salary but my mom was a stay-at-home mom and did not. Still, they put what they could into a college fund for me starting when I was born. They divorced when I was in 5th grade and stopped contributing, but due to the beauty of compounding, it covered my tuition, books, housing, and some bills through my entire four years at a major public university. I left with no debt and am eternally grateful, especially after watching so many friends and my boyfriend struggle with college debt. If your kids get scholarships or government loans, great — but if they don’t qualify (which has happened to some of my friends, when there is a divorce and one parent earns a lot but isn’t contributing, and the other earning hardly anything), they are stuck with private loans with very high interest rates.

    I just don’t understand how you can have a child this day in age and not save at least a little each month for college — even $100 a month. The costs of school are skyrocketing and you are doing them a disservice not to save at all. Going to a community college just isn’t sufficient anymore if you want a competitive edge in the work force.

    Now I did hold a part time job starting the summer after my sophomore year, which gave me my “fun money,” but I’m so glad my parents didn’t force me to work, especially the first two years. I had a very difficult and long adjustment period to moving away from home, so not having to work at first was a huge gift. I have had friends who have worked all the way through college, and I think that’s fine — just not freshman year. It’s a horrible idea to expect your child to hold a job and manage the first year of college without going insane. The adjustment and learning time management is very difficult the first year.

    I do agree that AP and placement tests can help, but most people can only place out of a semester with them. Some are able to place out a full year, but that is very rare. All the other enrichment such as sports, travel, reading, etc is great, but it doesn’t serve as an excuse for not saving anything.

  51. DivaJean says:

    In this economy, saving for college is like some unattainable dream for many parents. Getting thru week to week is what most are striving for now; making sure everyone is fed and has a home to live in is more important than what might happen in ten years or so. Is it fair for everyone in a family to scrimp so one or two go to college? NOt necessarily so in my mind’s eye. That being said- we do save SOME for our kids college/post high school plans, but not enough to likely cover them completely. I have some kids who might not make it into college or secondary school- time will tell how delayed or what learning issues they may have. Obviously, I save for them just the same, but likely, their money will be used for other needs.

    I realize that most on this site have some level of being ahead of the game, secrets and plans that have guided them- and this is what I look for here, not postings or comments about how I am potentially ruining lives by not spending every penny on my kids.

  52. KellyKelly says:

    Emily, (Post #51)

    Are you an only child?

  53. Kelly Kelly —
    Nope, there are three of us, and my parents saved college funds for all of us. My little brother is a at a major public university right now, but because he is in a fraternity, he is going through it much faster than my sister and I did, and will definitely have to start working soon to help. I have no problem with kids paying for some of college — I know many parents can’t pay for all of college. I just think if a parent can afford to contribute anything, they should. Even if it’s only enough to cover the first two years of school. Any debt relief you can provide your child in the future is worth it. My coworker is about to turn 30 and is still trying to pay off his student loans. That just shouldn’t happen, especially when people that age are trying to start families of their own.

  54. Stephanie says:

    My parents didn’t save squat for me. Luckily I had a grandfather that put me though a junior college and I have been responsible for the rest. I may not have completed college in four years like most out there but I know I have a higher value on my education than my peers. So I have to make my student loan payments every month, it isn’t the end of the world.
    But it ticks me off that I am going for a degree that I am not even passionate about anymore. It ticks me off that I haven’t learned that much in college classes that actually relate to my degree. I had a lot of life experiences but unfortunately I listened to my head and not my heart. Teach your kids about that.

  55. NP says:

    Stephanie, I don’t think “most” finish in 4 years any more.

    Emily, I don’t think which college my kids begin their education at will make that much difference. I don’t expect them to attend an Ivy league–they can if they want and are driven, and naturally I would support that decision as much as I can financially (I’ll still be working and making good money). I think it makes good sense for them to attend community college and avoid that whole moving away for freshman year and adjusting to life out of the nest and college and maybe working.

    Hopefully they will be working some in high school and be able to continue to work in young adulthood while attending community college. After they have proven themselves at that level I would be supportive of university education and graduate school–they can help with the expenses though. It is their life and their education and they will benefit from it. The kids have money saved for them, but it isn’t necessarily earmarked for college, and they contribute to their savings even though they are in elementary school.

    I can finance education–can’t finance retirement, so the bulk of my big-time savings is going to retirement.

  56. Bill says:

    Sending my kids to a private parochial school from kindergarten through high school is still cheaper than paying the extra cost to live in the “right” public school district.

    Graduates from our private school go on to the same colleges and universities as do public school graduates.

    As for college, I am going to do whatever it takes to make sure my kids are treating it seriously (some work component, even if they only work for me)

    I went to the most expensive college in my state and saw many “free-ride” kids treat it like a $30,000/year vacation – several didn’t finish, and their parents weren’t independently wealthy, either.

  57. Daisy says:

    I guess I’m a living example of this post.

    I was blessed with a lot of the stuff Trent mentioned here. My parents sent me to a great private school when I was in preschool and primary school.

    I had such a fun time in that school; it taught me how cool learning is. I still remember the projects I used to do back then: shooting a movie based on “Animal Farm” with borrowed equipment for English class, pretend news and radio programs; webpage design, painting in oil when I was second grade, learning how to play the violin and speak Chinese…

    I’m not saying public school wouldn’t be a good option for some people though. I guess it depends on the schools in your family’s area. At that time, the public schools in our area didn’t even have enough schoolbooks and teachers.

    My parents also saved up money — while making my sister and me help out, of course — to send us on travel experiences. True enough, they opened our eyes to a lot of things.

    I think all those factors aren’t the only reasons kids can get better test scores, but they do help a lot. I got serious and studied harder as a kid because my perspective changed. I got great test scores — in fact, I’ve been accepted in every school I ever applied for — and think differently from other people my age.

    I’m often humbled when I think about how my parents’ choices were large factors in the way I am now.

  58. dePriest says:

    I don’t think parents should pay for their children’s higher education – let them pay for it the way we did, with grants and loans (grimace). We have paid for their private educations through their childhoods. My children are fortunate in that my husband is a college professor, and for every class he teaches he gets one free to use himself or to give to a family member. If my children wish to go to his university, they will only need to pay for books and lab fees. If they decide to go somewhere else, they have to figure out how to pay for it. Of course, we will help in any way we can, but we’re not gettng any younger, and retirement beckons.

  59. Shandory says:

    Hmmm. Interesting posts here.
    I’d like to comment on the musical instrument side of things…our daughter is 10 and very excited to add the bass to her already violin playing. A bass is quite a bit more than our borrowed violin…$1500 out-right, OR $50/mo to rent PLUS lessons of $101/mo. So, we’re looking at $151/mo because purchasing it isn’t an option (she’ll outgrow this size in a year).

    We’re leaning towards having her simply stay with her violin lessons only for another year…simply because it’s too costly right now. We are also investigating if we can use part of her Coverdell to pay for the instrument/lessons…

    I think as mentioned in an earlier post, it’s simply a parent’s job to provide what they can, when they can. It’s such a personal and intimate thing to make these decisions about extra-curricular activities, trips, public vs. private, homeschooling or not. These decisions are based on not only what is best for each individual child, but is based on what you can afford, what options that are available for your family, work schedules and such.

    Personally, I am grateful that we are able to set aside money that is earmarked for each of our children (we have 3) that is for education only…whether that be college, vocational school or whatever is decided down the road. I encourage every parent to make this a priority. Not only will it ease financial burdens now, but for you and your children in the future.

    Some say it’s not their responsibility to save for their child’s college education…again, a personal choice…one I am thankful for the ability to do, and know my children will be when the time comes for them to foot the college bill…and I say – “well dear, your father and I have been setting aside some money to help for such a time”.

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