Why I’m Not Saving for My Kids College Education


universityWe used to save for our daughter’s college.  We got a 529 and contributed monthly.  We did this because this is what you are supposed to do, right?  Then we started to do some research on this subject and we changed our minds about saving money for our kid’s college.

I had been programmed to think that without a four-year college degree my kids would not get a decent paying job.  We were all brought up to believe that we needed to do whatever you can to get that degree, including going $37,172 (2016 average) into debt.  With 20% of American households carrying student loan debt the issue of higher education is now being looked at by the President, Congress and the average American.  Are the brick and mortar four-year University degrees worth their cost? Minds are changing and I believe that the typical post high school education is going to be different from what we have seen for decades.

We have now chosen not to save for our kid’s college education.  The reasons are many.  I will still encourage my child to get a higher education, but I no longer think that I need to save money for it.  There are so many options now, and I will encourage my kids to save their money, look at alternatives, and discover their interests early.

Reasons I am not putting money into a 529:

College may not be for them

As much as I will encourage my kids to look at higher education after high school, I will also let them know that there are alternatives.  It is their life and they should do what is right for them.  If I had saved for my kid’s college and they choose to do something different, I would be out all of the gains (and a 10% penalty fee) in their 529 accounts.  Should’ve put that money in my retirement account.

Community College

If you want to get a four-year degree take your general education credits at a community college.  It is a fraction of the cost, roughly $7,020, as compared to $30,000 at a University.  Or even better, take some “dual enrollment” courses so you are receiving both high school and college credit but not paying for the tuition.

Political Change

College may be free in the future thanks to the government and your tax money.   With the upcoming election we have one candidate that is proposing to have free in-state four-year public college or university. This free education would be for any student from a family that makes less than $125,000 a year.  Psst…if you retire early (before your kids start college at least) your income will most likely be less than $125,000 a year.  No matter the outcome of this election, I foresee that by the time my kids go to college (14 years from now) the cost of college tuition will in some way be subsidized by taxes.

Online Options

The brick and mortar college cannot sustain itself as it is currently functioning.  Many companies and industries have gone down because they could not adapt and change to the current climate(culture).  Borders Book stores, Blockbuster video, the newspaper industry, to name a few have been decimated because they were brick and mortar and their product had gone digital.  The same is happening to education.  It used to be that you had to go into a physical classroom to get the knowledge you needed for your career. Now there are hundreds of options online.  To learn a skill, it can be as easy as watching a YouTube video or going to an online university.

My last two years of college I had online versions of my courses as an option to take.  It was great, I saved so much time not commuting to the school, taking the course at whatever time suited my schedule and sitting in my pajamas.

Online Universities are becoming much more prevalent and are great options for many different degrees, certifications, or licenses.  Some of the country’s top colleges are now offering online versions of their degrees with the same faculty and library resources as their on-campus versions. Penn State, Boston University, and Northeastern University are just a few of the universities that offer online degrees.

College Experience

Now you are probably saying, “what about the whole experience of college, the networking, and the great parties?  You aren’t going to get that from sitting in front of a computer for all of your college career.”  I agree, there will be things that you might miss by not being on campus, but in my experience these things are parties with underage drinking. If one of the reasons to attend a four-year university is to have different experiences and find out who you are then that can be done in other ways (travel the world, tour museums, volunteer for a humanitarian organization, etc.).           

Trade Schools

Blue collar jobs will always be around and in demand.  Training is much cheaper and can even be free. You can attend a trade school, find an apprenticeship, or learn from a mentor.  Four-year universities require you to take two years of general education courses before you can even start on the degree that you want to pursue.  You have to take art courses when you want to major in biology.  You are forced to pay (about $30,000) for classes that will have no bearing on your career or life. Trade schools educate you on the trade you will make a career out of and nothing else.  Not everyone needs to take an English course, a biology course, and a psychology course to discover what career path they want.

Working with your hands will always be in demand.  If the apocalypse ever happens these folks will be the ones to survive because they will know how to fix our infrastructure, rebuild our homes, and provide our food. Put more emphasis on jobs that will always be in need as an option for your child (mechanic, construction, plumber).

Retire early, stay home with kids

Instead of saving for your kid’s future, why not invest in him or her now?  This investment could be you saving for your own early retirement so that you are able to spend time with him or her before they go out into the world.  As kids grow up they want to be with their parents less and less.  Before this starts to happen, take the opportunity to teach them what you know about life, finances, home economics and other topics that are not taught in school.  Have experiences with your kids. Encourage self-discovery. You and your kids will treasure these memories and learn a lot from each other.

Invest in primary education

Primary education is much more fundamental and important.  It is what is setting them up for their college life and independence.  If you want to invest in your child’s education their younger years is much more important. If your child shows an interest in video games, enroll them in a course that teaches them how to develop and build video games.  If your child is interested in building, enroll them in some carpentry workshops.  Spend your money on education now instead of saving it for their future education. This could help your child discover what they would like to do as a career before they even begin their higher education.

Kids pay for their own education

Kids, pay for your own future, be in control of yourself, be responsible, be an adult.  My parents were kind enough to pay for half of my tuition.  The rest of it was paid for by me.  I worked for many years before I went to college, I worked while I was in college and I worked every summer break that I came home.  By the time I graduated I had about $300 to my name but absolutely no debt.

Your kids need to learn how to be responsible adults so have them start by investing in their own future.  It is their life and their career so why shouldn’t they have some skin in the game?  As a parent you can still contribute whether it be monetarily, letting them live at home rent free, providing food, transportation, etc.


Education is fun and challenging.  There is so many ways you can become educated, don’t just assume you have to go to a four-year college and be $37,172 in debt to achieve the “American dream.”  Get creative, find ways to start your career with no debt and have experiences beyond the frat parties.

My kids will be getting support and help from me….just not in the form of a 529.

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2 Responsesso far.

  1. Vikki Donelson says:

    My three children all took different routes to college. Daughter went right into a 4-year university, son a trade school that took approximately two years. Other son went to community college and then on to UW. Being the bookkeeper I am, I added up each education and found they all three came very close in costs. I absolutely agree that the student needs to have some skin in the game so I hope we are not relying on an education paid by government.

  2. As someone who is going through college and having to pay for it on my own, I’m glad that my parents did not pay for my education. Don’t get me wrong, I don’t like being in debt but being in debt does teaches you things.

    I am now more aware of my finances and I am actively seeking more ways to grow my finances and prepare for my debt. I feel that learning the true importance of money is important and having to pay for your own college tuition is a great way to learn. Of course just help your kid out a bit in terms of learning and don’t just throw them into the deep end!

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