Our daughter Evelyn was born in June 2015, and we just had our second child, Ford, a couple of weeks ago. What better time to start planning for kids' college than when you have two children under the age of 2?
Naturally, as a financial planner, I have already been contributing to accounts for the benefit of our children (both a 529 plan and an UTMA account, just as many of our clients do). But like many of our clients, my wife and I are already having discussions about how much (if any) we want to contribute to our kids' college expenses. That's right: it's not a given that we will contribute any amount at all toward a four-year degree for our children. We want to be open-minded enough to question whether that will necessarily be the best step for each of our children.
After all, isn't college going to cost at least a quarter million dollars for each of my children? Heck, I might as well suspend all retirement savings in favor of dedicating our family's resources entirely to education funding. On the bright side, saving for 2 college educations (so far) is a more manageable task than the 7 educations for which Austin and Jennifer Colby are planning.
In all seriousness, what is an American middle class family to do? Hope for politicians and economists to come up with (and implement) free-college-for-all schemes? Hope that my kids earn athletic and/or academic scholarships? Encourage them to become entrepreneurs, the next generation of degree-less business founders?
Enter Beating the College Debt Trap, by Alex Chediak * (Zondervan, December 29, 2015). I have been working my way through this book recently, and I believe it is one of the most important books any parent (or student) can read. Chediak outlines a better way for families to do college.
Alex is an engineering professor at California Baptist University. If you're like me, any person who is an engineer has a mind you are likely to respect. Further, engineers tend to be disciplined in their personal financial lives, and their outlook on life could be summarized with Joe Friday's "just the facts, ma'am." In my own life, I like to hear what engineers have to say and what they are thinking about.
Alex's book is insightful, practical, and loaded with statistics and actionable intelligence. I hope to write a series of blog posts with key concepts from his book. In the meantime, I will simply pass along Alex's list of "five things students can do to get a degree without going broke.
1. Prioritize value over prestige when choosing a college.
2. Leverage skills to earn higher wage income during college.
3. Have a game plan to finish.
4. Be expeditious about graduating.
5. Have a greater understanding of how the system works.
To read more of Alex's insights on those five areas, read his entire post on the subject here.
* For any of you readers that have: a) read this entire post; and b) are interested in this book ---send an email to myself, Austin, or Karie, and we'll mail the first 10 respondents a copy of this book as a gift from The Wealth Group.