Tips and Tricks for Today and Tomorrow #10: Should You Pay for College or Share the Responsibility

Today I want to talk about something that's on the mind of many parents. How much should I be saving for my kids' education? It's a big question emotionally, financially, and strategically. And there's no one-size-fits-all answer, but there are smart ways to think about it that align with your values and your long-term financial health.

First, let's talk about balance. Yes, college is important, but so is your own financial future. When we build financial plans for families, we look at how to save for college alongside other goals: your retirement (remember, there are no loans for retirement), emergency funds, which increase your chances of keeping your plan secure no matter what life throws at you, and shorter-term personal goals, things like vacations, home renovations, or paying off debt. These shape family life and well-being now, as well as your ability to do more with your money later in life. Think of education savings as one part of a broader financial strategy, not the whole picture.

Here's another key question. What do you believe your child's role should be in paying for their own education? Some parents want to cover everything. Others feel it's important that their kids contribute through work, scholarships, or loans. There's no wrong answer, but your values should guide how much you save and how much you talk to your kids about it.

Next, let's consider the type of education experience you're planning for. The average in-state tuition is about $11,600 per year. Out-of-state tuition jumps to roughly $30,800, an increase of over 160%. And in places like California, out-of-state costs can be as high as $38,100, that's 230% more than the average in-state tuition. And don't get me started on private school expenses. Those numbers add up fast, and they should absolutely be part of your planning conversation.

It's not just about what you can afford, it's about what makes sense for your family. That's why it's crucial to start talking with your kids early. Help them understand what you're planning to contribute, what options might be on the table, from community college to scholarships to work study, and how their choices can impact their financial future. In some cases, it may make sense to map out scenarios, if you go here, you will not have any loans, versus here, you'll end up with a certain amount of loans, which could translate to a specific monthly payment for a number of years post-graduation. These conversations build awareness and accountability.

At the end of the day, your college savings plan needs to fit you, your values, your financial goals, and your long-term vision. If you're not sure how to strike the right balance, or you feel you would benefit from understanding how education funding fits into your financial situation, that's where we come in. Let's build a plan that supports your child's future without sacrificing yours. Thanks for watching.