My biggest financial goal is not to retire with a healthy savings account and a stable 401(k). I’m not worried about getting a six-figure salary or owning multiple properties. The way I measure financial success is: Can I pay for whatever college my daughter chooses to attend?
I was born in 1985, near the very beginning of Generation Y. While there are plenty of stereotypes floating around about me and my peers, I think every single Millennial will agree with one lesson ingrained in my mind: The only way to succeed in life is to graduate from college.
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We are the generation of college debt. My generation is comfortable taking out loans as big as mortgages just to get a degree. We’re the boomerang kids, whose loan repayment schedules send them back to their parents’ basements when the entry-level salary just can’t keep up.
We’ve spent a lot of time stressing over college and money ... and I, for one, can't seem to stop.
Planning Ahead and Doing the Math
In a couple of weeks, my daughter will have her fifth birthday. She’ll get plenty of toys from family and friends, and she'll get checks from a select few grandparents and great-aunts. I'm planning to put those checks straight in her college savings account. It might not be the most exciting use for the cash, but she’s still too young to miss it.
When my daughter was a year old, I started a 529 and another, smaller college savings account. I’m in an extremely fortunate situation in that I receive child support payments from my daughter’s biological father, and I don’t need those payments to help pay my monthly bills. I decided that money would be best spent preparing for future educational expenses. Thus, $400 a month automatically goes into college savings.
It sounds reasonable. If I keep it going every month until her high school graduation, we'll have roughly $86,000 saved for college. That's an impressive sum. Until you realize that many private schools already cost more than $40,000 a year before room and board. College costs have been growing at more than 6% a year. The College Plan Savings Network estimates that, even with modest 5% growth, a private school education for four years will run upwards of $300,000 by the time my daughter heads off to college.
I'm a freelance writer, and we would need to hold back an additional $1,300 or more each month to have that amount saved before college starts. And this is just for one child, mind you.
After speaking with a financial planner, my husband and I started looking into individual state-run programs for college savings, but many penalize you if the money doesn't end up going to in-state tuition. There can be even larger penalties if the money doesn’t end up being used for college at all. We thought about making our own investments in relatively safe stocks, but gambling with that money feels terrifying.
We also thought about lots and lots of prayer, but that’s probably not the most financially stable option.
Why She Should Have a Choice
When I look at the mountain that is college costs, I’m so tempted to brush off my concern and say, “My daughter will get a scholarship.” I get pragmatic and think, “There’s nothing wrong with a state college.”
Still, there’s a lingering doubt in the back of my mind. There’s this nagging guilt at the idea of saying no.
For my generation, college graduation is a measure of success. It often feels like the only one that matters.
My parents had a simple rule: If I kept up my GPA, they'd pay for college. As my friends struggled with second jobs and mounting debt, I was able to buckle down and focus on my studies. When I was in college, I asked for money when I needed it, and sent home my report card for inspection, just like I had during elementary school. My parents’ kindness made my young adult years so much easier because I don't have any student debt. And I want to be able to provide that type of experience for my own child. I want her to pursue her dreams without worrying about out-of-state costs or FAFSA applications.
What if my daughter was accepted to Washington University in St. Louis, the school that happened to be my first choice? I turned it down in favor of another private school that gave me scholarship money. I’m not bitter about the decision, but I distinctly remember the disappointment I felt the summer before my friends and I left for school.
For my generation, college graduation is a measure of success. It often feels like the only one that matters. Providing the educational opportunities that my daughter might need feels like the measure of my parenting. But honestly, the rising costs make it more and more unlikely that I’ll be able to cover the entire bill on my own.
Right now, I’m still trying to figure out just how my husband and I will reach this goal. I keep squirreling as much away as I can, refusing to touch the account even in cases of emergency. I’d rather add a major purchase (or a hospital bill, like I had to last year) to the credit card than touch my daughter’s college account. I’m already stalking websites like Alltuition, the financial aid search engine.
And I suppose I’m like every other parent, praying my little one will show signs of becoming a varsity athlete.
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Lindsay Cross is a former data analyst-turned-writer, who is now an Associate Editor at Mommyish.