As you know, Jessica and I are having a baby in a few months, so we've been thinking about how we're going to invest in our kids' futures. Everyone at work is horrified when I tell them that we're not going to pay for our kids' collage. I know such a stance is evil and unAmerican, but hear me out.
1. People line up to loan money to college students; no one will loan Jessica and I money for our retirement. College loans are cheap, easy money with low interest rates and undemanding repayment schedules.
2. Our kids will probably be sick of my meddling by the time they leave the house.
3. There may be more efficient ways to invest in your kids... ways that most people don't think about but that can make an even bigger difference in their lives. For example, Jessica is planning to be a stay-at-home mom; there's an opportunity cost to that decision, and in the long run it will certainly be more expensive than paying college tuition.
When it comes to launching missiles in the Mommy Wars, Sarah Palin has nothing on Christopher Ruhm. On Thursday, the University of North Carolina, Greenboro, economist published a study showing that kids from high-socioeconomic-status families take a long-term hit when their moms work outside the home—at ages 10 and 11, they perform more poorly on cognitive tests and are also more likely to be overweight than those whose high-status mothers leave the workforce. ... "This comes down to a fundamental principle of economics: something has to give. We can't have it all," he says.
That's right. We think having a stay-at-home mom will be a bigger advantage for our kids than a stack of money would be when they turn 18.
I like your decision. My wife has stayed home since the birth of our first child over 13 years ago. We have had our financial rough times. But we are doing well now. And I can't tell you how much of a benefit I believe that it has been for our children.
Congratulations on the baby.
We are in the same boat. Went from two income family down to one and the pinch is on but having mom available for the new baby and the two other boys is wonderful.
We already told the kids that college is up to them to pay for. They have options: Borrow, Serve their country (GI Bill), get a scholarship, and/or work. They are going to know firsthand the cost of education and hopefully, they will take it seriously when they have to earn it.
If you're going to make that move, be ready for the riposte: Why should your kids go to college? I think that a solid majority of college educations being purchased today are complete wastes of time and money.
How much better off would a young adult be spending those same years learning the basics of some particular business? There are still many areas where an undergraduate degree is effectively a legal requirement (e.g. law, medicine, engineering). But if the child isn't planning on going in one of those directions, I say let him start learning how to handle office politics and get things done in the business world.
There are plenty of exceptions, of course. I'm just objecting to the general assumption that every young adult should attend college. As Thomas Sowell has observed many times, it's easy to invest too much in education, especially when today's education product generally has such low quality.
seems like a pretty good idea, but I won't count on student loans being as easy and favourable in 20 years time as they are now... when I was born, a lot fewer people attended universities, and student loans didn't exist (although there were grants)... I hope and expect that attitudes to debt will shift in the next few years, so who can say what will happen to the loan system.
Even with that proviso, I think it's a good choice you're making.
Wow, I'm surprised by the positive responses from everyone.
As for college loans in the future, I bet that for demographic reasons they'll get even cheaper and easier. As America ages, each child will be more valuable and our society will give more to them.