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Working Moms
jf198400
member
S/O Quality of Life, Paying for College, Retirement, etc.
jf198400
member
in Working Moms
I noticed several people talked about fully paying for their children's college education in the post yesterday about Quality of Life with 3 Children. How many people really think this is a realistic goal (with any number of children)??? I also have seen comments about having houses paid off, retiring early, etc. I honestly can't imagine how those things are possible unless you are wealthy. I'm really just interested to see how my point of view compares to others.
For background, I am 28 and DH and I have 2 kids (and would like 2 more eventually). We both come from middle class families in a nice suburban area MCOL area. It has always been my impression that a mortgage is a perfectly acceptable part of life and as long as its paid off by the time you retire, you're in great shape. I can't imagine how anyone would have their house paid off fully in less than 30yrs (more likely longer since people refinance). Do you live in a really LCOL area?? DH and I are still just trying to save to move out of our townhouse into a larger forever home.
As far as retirement goes, I think my generation is screwed. DH and I anticipate working beyond 65 even though we are currently putting 15% of DH's salary into our 401k. Does anyone really believe retiring early is feasible? People are living longer and longer, who's to say we won't live to 100. How can you finance living for that long.
Now as far as college goes, I do believe in helping your children to the best of your ability. But unless your kid goes to the cheapest state school I don't think its possible to pay fully for college. DH and I graduated from private colleges 6yrs ago and my tuition plus room and board was over $40,000 per year. I had a full scholarship and my parents helped with room and board but I still graduated with some loans. But they are minimal and well worth it. I could see if your kid goes to a state school then tuition is similar to the price of daycare, so that is feasible I suppose. But really what is so wrong with kids contributing to their own education? I think thats part of being an adult and making adult decisions.
So that's my view point. I'm curious what others think, and how your upbringing contributed to that.
This discussion has been closed.
Re: S/O Quality of Life, Paying for College, Retirement, etc.
I think it completely depends on how old you are when you marry, when you start your actual career, have kids, buy a house etc. DH and I are turning 30 this year, got married and bought a house when we were 25, now have two kids, have been active in our professional lives since college so we have are working on our 401Ks, other investments, and pensions since day one. We have no credit card debt, just the house and DH's new truck. We live in a M to HCOL area outside of boston, but we both make a very good living.
DH says we are on track to pay off our mortgage a least a few years early, he works in finance so he knows when to pay extra to eliminate fees, and interest stuff. We also have college savings accounts set up for the kids and hope to pay at least the majority of their educations like our parents did.
I don't anticipate we will retire early but not terribly late either. I just think all of these issues vary so much it is hard to say what is realistic for every family. So people save more aggressively, some people start in their careers later, some people never buy a house and just rent. It might have something to do with upbringing either enjoying what you had, being content with what you had, or wanting more than what you had but not sure.
Good points. I am including some specifics below not at all to be "braggy", but just to show what we have done and what our plan is to be able to achieve these financial goals. And just remember, it's never too late to start.
We live in Chicago, which can be a relatively HCOL area. DH and I are both lucky enough to have landed in great jobs that pay us each six figures a year, so this definitely contributes to our ability to divert a large amount to savings and having very little debt (I don't know if you would consider this wealthy or not). Right now, our monthly budget is roughly split three ways (1/3 child care/preschool, 1/3 monthly expenses, like mortgage, food, bills, and fun stuff, and 1/3 savings for education and general savings). This is our "take home" money, as retirement contributions come out before the budget is spit three ways. We are both 30 years old, and started putting money away for savings and retirement when we were 21 (minimally 10% from each of us with it growing each year), and so our retirement savings is already in a good place (over $300k). Until we phased out, we fully funded two roth IRA's each year and also contributed heavily to our 401ks.
As I've stated before, for us, it is about choice. With our income, we could be living a very different lifestyle, but we choose to plan and save instead. We bought a fixer upper in a great neighborhood with top schools when we were 24, and have spent the last 6 years pretty much renovating the entire house. We also refinanced last year into a 15 year mortgage with added a bit to our monthly payment, but will have the house paid off before the kids are in high school and so money can easily be used for their private school tuition. We both drive paid off cars (a 9 year old Honda and a 4 year old Toyota) and will drive these until they die or we need a bigger car.
For college, we put away money to fully fund two Coverdell accounts a year (max is $2k each) and then also divert a healthy amount to 529's. Also, any money gift my kids are given goes into these accounts--and when they are old enough to want to keep this, we will likely split the gifts, half to savings, half to them. I am optimistic that we will be in a position to fully pay for college for all three kids, but if we are not, than so be it. I don't have an issue with them having to borrow money, but both of our parents fully paid for our college and I see the huge advantage it gave us when we graduated (and our ability to save a down payment and buy our home in Chicago when we were 24).
Again, I know not everyone is in the situation we are in, and I recognize we are blessed every day. But we also work hard, and prioritize what we are doing with our money, which is an important lesson for our children to learn too.
Will baby #3 be another girl?
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I totally agree with you. I have a high-paying job at BigLaw, but DH only makes about 1/3 of what I make, and I feel very stuck because I know that if I didn't keep my job, we wouldn't be able to pay for the things like you listed.
For what it's worth, if we are able to maintain our current level of income, then we are actually on track to pay for it all, even though we live in a HCOL area. And this is how: DH had his whole undergrad paid for by his parents, I paid for my own undergrad and law school by working lots during the school year (35 hours a week on top of full-time school) and working 3 jobs in the summers, and graduated law school with no debt. With the money DH saved while I was in law school, we bought our first condo at 25, saved about 1/2 of our take-home income, and then bought a house at 30. We kept the condo and rented that out, and it's paying for itself, so in 20 years, it'll be fully paid for and I plan on using that money to pay for our DS (or any future children's) college.
We save about 1/3 of our take-home income, and that amount is put towards our retirement savings account and principal on our mortgage. Since we've been paying our mortgage aggressively, we are on track to have it paid off early (in 13 years); at which point I plan to use that money to buy another house and rent that out, and hopefully have that paid off in 25 years (when we are roughly 65), and then we can add that rental income to our retirement.
We've made a lot of sacrifices to get to this point though - we only have one (old) car, we don't have cable, we hardly ever buy new clothes, and we live way below our income. And even then, like I said, we wouldn't be on track to reach all these goals if I didn't have a high-paying job....and that is scary. I sometimes day-dream about what it'd be like to work part-time or have a less stressful job so that I can enjoy spending more time with DS, but for financial reasons, I know I can't. I do wonder how other people plan to do it.
It really all comes down to choices, and which path you want to take to ge to your goals.
We moved last year into what we hope will be the house we raise our family in. DD was born 3 months after we moved in. We also kept our old home and purchased another as a rental. So we have 3 mortgages. If we just had our current mortagage I am sure we could pay our house off in less then 30 years...but we prefer to have that money invested in the other properties and hopefully provide a good deal of income in 20-30yrs when our children will be attending college and we will be approaching retirement.
We could have planned to pay off this house early and borrow against it, but it makes more sense to us to have 3 paid off houses (which will be worth much more than our current house alone) in 30 years versus having to try and remortgage one we already paid for. Plus the rentals really help our tax bill at this point.
We will defintiely help our children with college, but we are not planning to fully fund (tuition, room, board, books, living expenses) We will definitely expect them to work on at least a part time basis while they attend school and they will most likely need to take some loans or earn scholarships as well.
Our primary focus is definitely on retirement savings/planning. Both sets of parents have done a fabulous job doing this for themselves, and it is a MAJOR relief to be an adult with a young family and not have to worry about supporting your parents/In-laws. In fact, my parents planned so well on such low middle income salaries that they are fully retired in their early 60's and able to help us out by watching our DD full time while we work.
Unfortunately we are only able to put around 15% of our combined gross income into retirement accounts, but we consider the rental houses and their income, as well as, both of my parents houses (which are paid off and we will inheirt 50% of) to also be retirement assets. So we feel we are doing the best we can in regards to retirement at this point.
We are undecided about 2 versus 3 children, but I don't believe that a 3rd will have a huge effect on our long term financial stabilty or plans. A third isn't going to change where we live, what we choose to drive, how much we plan to contirbute to college, or how we vacation, or how much money we save for emergencies. It would effect more the small things like how often we eat out, how much we spend on birthdays and christmas, the number of activities a child could do at one time, how often/how long they could attend summer camp, whether they always had their own bedorom etc.
And I don't think any of those little things I mention are going to be so drastic that any of our children would notice or feel they got less just because we chose to have a third child.
I think the answer is you don't have to be wealthy but you need to make a lot of money and live like you don't. I bet if you asked most of our friends what our income is, they'd be off by a $100,000.
BUT, honestly, we're not trying that hard to save "for college."
I think part of fiscally educating my kids needs to be helping them think through what is a reasonable amount of money for them to spend on college in light of their goals. If a giant pot of money is sitting in their 529's just for that purpose, I worry that they are going to pick the shiniest funnest college, getting distracted by things like cool new dorms and quirky campus traditions. Seriously, I don't know how many of my peers in high school chose to go to LESS prestigious small private colleges over one of our very good state schools just because the state schools sounded boring, and how many of their parents scrimped and saved and mortgaged themselves to pay for it.
We contribute some to a 529 plan, keeping in mind that if something happens like our kids getting scholarships or deciding to launch a start-up at 19 instead, we'll have to pay penalties to use that money for anything else.
But beyond that, we just save generally for retirement and to build family wealth. When it comes time for college we'll look at our kids and the schools they're considering and decide whether tuition is a reasonable family expenditure. If we have plenty of money, we'll probably pay. But if we don't, and the cost of 12 years of tuition would basically mean all of our life savings (except what is specifically saved for "retirement") then I feel no obligation to hand over that money so my kids can make cost-blind college decisions.
It definitely has a lot to do with choices, and everyone's situation will be somewhat different. You have to start by deciding what your priorities are. I personally do not like to carry any consumer debt (credit cards, furniture on 0% financing, etc.) but I don't see much point in killing myself to pay of a mortgage early. If it happens, awesome; but it is not something I'm going to sacrifice other priorities for. We put money into our retirement accounts first, then our home (which meant saving up for a down payment for the last several years and now means a repair/upgrade fund), then college funds for the kids. We do try to set aside some for vacations each year but we are not extravagant with that so it is not a big budget item.
Paying for college 100% is something I would like to do if possible because I'd rather the kids not start out with student loans, but if it meant our retirement funds were underfunded I would not do it. As it has happened, my father passed away last year and left me some funds from his retirement accounts that I am using for the kids' college funds, so we are looking much better on that than I expected. Of course I'd much rather have him still alive and using that money for his own retirement expenses, but we talked about it before he died and he liked the idea of using it for the kids' college (he was a college professor).
Long story short, set your priorities first, figure out your budget and what is reasonable, and then when you come across a big bonus or a period of layoff or whatever the case may be you will have a plan and know where to give and take within your budget. We did a few financial planning sessions with our bank that were very helpful in defining our goals and our plan, so I would recommend going through that process if you can.
Well it's sort of hard to fund my kid's college fund when I'm still paying MY student loans. My parents offered some help with books/etc while in school but tuition was all me (aka loans). I was responsible and only took out enough for school, so I actually didn't graduate with a ton of debt comparatively speaking. BUT when I decided to go to grad school for 1yr the quit because I hated the program and that debt is almost as much as my 4yr degree. So yea, 40k in student loan debt sucks.
Our house will be paid off in 12yrs, and unless something crazy happens with the neighborhood we don't plan on moving. We purchased the home with the idea that we could stay forever here and when shopping we stuck with a price range where we could afford to put 20% down and the payment on a 15yr mortgage. While our house isn't as big/fancy as some of my friends' despite the same $ towards monthly payment we are going to be in an excellent financial position in our 40s.
We figure with young child(ren) we aren't going to be traveling/etc in our 30s anyway, so better to get the debt paid off so we have more disposable income when we can really do fun things.
We plan to help fund kid(s) college, but not at the expense of our current lives/retirement. There will be scholarships/grants/loans for college, but not for our retirement.
If medical costs weren't a concern, we are in a position to retire "early" (55) but we'd have to pay OOP for health insurance and I'm thinking that will be cost prohibitive so we'll likely keep working for insurance coverage until we reach medicare age. Unless we find ourselves financially able to cover a gap.
IMO covering costs of college =/= solely parental responsibility, of course, I also don't think college is the best path for everyone so there's that lol.
ETA - we live in a MCOL area and I also think some financial goals are a point of individual interest and not applicable to everyone.
I think like some pp have said, it depends on a lot of factors and choices you make. DH and I live in an area with a HCOL (or at least moderately high), but we are older, which for us means that we are well established in our careers. We live modestly, new-ish cards, but nothing fancy, and bought a house that we could afford with a 15yr mortgage. DH is super frugal and while that can be frustrating at times, I know in the long run that is why we will be able to retired in our mid-50s. I think we will contribute significantly to both my stepdaughter's and son's college educations, but we won't be cutting into our retirement funds to do it. If that means they have to go to a less expensive school or use some of their savings or even take out a small loan, then that's what will have to happen.
Yes, this is why in my original post I said I think you have to be wealthy to have these options. Yes DH and I both have fairly high salaries but daycare alone takes up half my salary. I guess I could have made a different 'choice' if DH and I had waited longer to start a family. We got married and bought our townhouse at 25 and had DD a year later. If we had waited 2 or 3 more years we would have been able to save a lot more money.
Anyways I guess I was hoping to hear from more average people who also feel like money is tight.
I agree with you for the most part, too. We will help with our kids' college as much as we can but I don't think it's realistic to say we will pay for it all. As someone who went to an expensive private school, I also think it's silly to say "we can't afford a private school but can pay for X." Kids end up with such a package of scholarships, loans, aid, etc. that you'll just have to evaluate the whole package when the time comes. Hard to predict what that may be when my kids aren't even in "real" school yet! I went to a great school but really didn't have unmanageable debt, thanks to work study, scholarships, parent contributions, my own contributions, AND working hard early on to pay off my debt as quickly as possible. I kind of expect it will be similar for my kids, but who knows what the whole system will even be like in 15 years.
We think we are done with 3 kids but might possibly have one more. I wouldn't let college costs stop me.
Oh, and, we were very definitely middle middle class and my parents had 3 kids, but never felt like I was lacking anything. We all did plenty of activities, took family vacations, had help with college, etc. My parents managed and prioritized well. We didn't go to super expensive camps or anything, but we had plenty of opportunities.
Yeah, this is me as well. I am not rolling in money but we were older when we had kids so we are further along in our savings goals, which is why I have the ability to make more choices. It doesn't mean I'm rich.
I am just a lurker right now but plan on joining this board after LO arrives in June! I think this is an interesting topic and wanted to chime in.
My H and I are both 25 years old and have been out of college for 3 years. We live in a rural area where the COL is low compared to metro areas. My parents paid for my college tuition (I went to a community college and then a state school where tuition was around $5-7K per year). I worked while in college and paid for everything else - rent, books, utilities, car, etc. My H went to the same colleges I did and paid for everything himself, including tuition. We were able to pay off his student loans within 2 years because he only had around $20K in loans. We purchased our first home last year and hope to have it paid off in 10 years. FYI - a house where I live that costs $200K would probably be $700-800K in some metro areas, at least according to the shows I watch on HGTV!
I personally don't think there is anything wrong with kids contributing to their own college tuition. My H did it because his parents couldn't afford to buy him clothes, let alone help him with college. My parents were better off financially (but by no means wealthy) and had saved to pay for my tuition. That being said, the cost of tuition 18+ years from now will probably be drastically different, and that scares me. We plan to set up some sort of savings plan for LO in the next year to help with college expenses. I do, however, think it's important for kids to have a job and pay for their own expenses while in college (even starting in high school) - that's part of being an adult.
As far as retirement, I think you will be surprised at just how much you can save before retirement. Obviously, the younger you start, the more you are likely to have. We could definitely kick up our contributions, but I want to see how much our expenses go up with the baby before we do that.
I don't think carrying a mortgage until retirement would be fun. Interest rates are relatively low right now, but it's still interest that you are paying. I also don't plan on sacrificing my financial future for my kids tuition - my H is proof that kids can take care of themselves if they have to.
Bottom line is - I think if you have an emergency savings account, are putting something into retirement, and are able to pay your mortgage/daycare/other necessities, etc. you are doing fine!
When my DD was born, we heard a lot of, "Better start saving for a wedding!" We have no plans to pay for any weddings, and if we paid for DD's, we'd pay for DS's too.
Our goals are to pay off the house in approximately 15 years, fund each child's college at 75%, and retire at 60. We are constantly looking at the budget and trying to strike a balance between living for the future and living for today. We each put 6% of our income into a 401k, and the company gives us an extra 9%. We put 5k into the combined college fund each year. We also have Roth IRAs. We strive to give 10% to charity (not necessarily the church, but including all of the charities we support). In the end, if we have to work an extra year or two, but we had a chance to enjoy life along the way, I'm ok with that. We are especially conscious of enjoying ourselves now while the kids are young because DH's grandfather died at 61 and his dad died at 58. So a long retirement is not guaranteed.
DH and I make a comfortable living and live well within our means. We decided to live in a great neighborhood and traded off to a smaller home. We try to save as much as we can and hope to retire early. My parents have been very generous in starting a college fund for DD. They paid for almost all of my college, though I spent 1 year at a community college and then took out loans too. I do expect that DD will continue her education after HS, and we will help pay for it with what grandparents and we are saving, but I also expect her to contribute to that. That could mean she works really hard in school to get scholarships or by working summers and during college to help offset some of her costs. My parents paid almost 100% to my 3 brothers' educations and none of them have a degree, so I think kids do need to take some responsibility for their education. They may have made different choices if they were financially responsible.
In my opinion if you are making the right choices to get ahead in these areas (retirement, mortgage pay down, college savings) money is going to be tight. I never said in my post money wasn't tight for us. It is tight every single month. Every single month we have to make choices and decisions about prioritizing necessary purchases.And that is because we priortize our retirement, houses and other savings and investments ahead of cash on hand.
Now I am not talking about bills. Those are easily covered. But, discretionary spending is highly scrutinized in our household. Purchases forecasted and planned for and I am talking about $20 purchases and lunches out. Unexpected necessities like a car repair are paid out of our emergency fund and and then taken out of the monthly budget over the next month, or months to pay back the emergency fund.
If we put less into our retirement, savings, houses we would certainly not have to manage our spending so closely on a day to day basis,, we would be worried about whether we are going to be in a good position in the future.
** And I will fully admit that we are currently able to save/invest a lot more then we would be able to if we had to pay for daycare for DD. And realize this is not an option most people have. However, my parents didn't pay for my college because at the time saving for their retirement was more important. Their decision then has allowed them to retire earlier than most and help me at this point in my life with not having to pay for childcare. Personally, I tink it worked out better than them having paid for my college.
I consider us to be the type who make enough money to live a middle-class life but with not a whole lot, if anything, left over at the end of the month. I agree with you, that although ultimately almost everything is about choices (what type of career you have, where you live, etc.) it's not as though everyone has the same ability to make all the same choices. Or, the choices are different. For example, some people seem to be saying we choose not to buy new cars very often in order to save more for our retirements or college funds. Makes sense and is a reasonable choice. For my husband and I, we choose not to buy new cars very often in order to try and pay down his massive student loan debt and just meet our monthly expenses. We're both making the same choice but with a different end result. Some people may say that they don't take extravagent vacations instead choosing to save that money whereas for us we just simply don't have the money for extravagant vacations meaning there is not "extra" money there to save.
I think of it this way - sometimes I wish I smoked two packs of cigarettes a day just so I could give it up and have all that extra money. It's the same with household budgets, some couples have something like that they can give up and others don't.
I joke that I'll be working until I'm well into my 70s or until one of my kids is successful enough to support me. But, that's what happens when you get started sorta later in life - my husband is 39 and really just started his career a few years ago.
Kelly, Mom to Christopher Shannon 9.27.06, Catherine Quinn 2.24.09, Trey Barton lost on 12.28.09, Therese Barton lost on 6.10.10, Joseph Sullivan 7.23.11, and our latest, Victoria Maren 11.15.12
Secondary infertility success with IVF, then two losses, one at 14 weeks and one at 10 weeks, then success with IUI and then just pure, crazy luck. Expecting our fifth in May as the result of a FET.
This Cluttered Life
That's why I posted this. I didn't ever think it was normal to fully pay for your kid's college education either. But I went to an expensive private college so everyone I know has loans too.
I think this is so important too--as much as it is important for us to plan and save and is a main focus, we also want to make sure it is not at the expense of "important" (and I say this relatively) things now.
Will baby #3 be another girl?
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I think you summed it up very well!
We're similar except for us its because we started early in life. If we had gotten a bit more established before having kids we'd have more "choices."
I agree with this. Being told it's all about driving old cars and making the right "choices" is kinda insulting, because it assumes those are even choices to begin with.
We live in a HCOL area and make modest salaries, both for the area and for this board. We pay our bills and have a savings cushion and modest 401ks, but we only put $100-150 in savings a month. We do not have a set account for DD. I wish we could put aside more, but student loans, daycare, car payment for our one car (had to replace the one we drove into the ground), rent...it eats away at our salaries.
Part of the problem is we got a late start - husband and I both suffered several setbacks in our 20s, so we really didn't get started on the right track financially until we hit 30. And part of the problem is our careers just aren't well-paid, even though we're both college graduates and work in the tech field (we're not engineers/programmers).
We'd like to buy a house, but homes around here are are in the $400-500,000 range. At $100/month, it'll take us 67 years to save up a 20% down payment. Everyone we know bought their house with a down payment paid by family, but that's not an option for us. In fact, in the next few years it's likely we'll start helping out our parents.
Okay--I am totally not trying to anger anyone on here, but I have to say--for me, some of the choices I made were at a young age to get me to the point I am now. This is an important lesson that I am already starting to teach my own children--that every choice you make has a consequence, good or bad. I intentionally chose a major in college that would translate into a fairly stable (and now we are finding, fairly lucrative) corporate career (and so did DH). I lived in a super cheap apartment from 21-24 (and DH chose to live at home for 3 years after college) so that we could buy our house. Oh, and we worked really, really hard with our fingers crossed that it would pay off. And we got lucky that it did.
DH and I (even from a young age) have always been planners. As a few others have stated--we pay the "important" accounts first (retirement and savings).
I completely understand that not everyone makes these early life choices this way & that's okay. You have to follow your own heart and brain with what you want to do. You asked the question, and I answered.
(Edited the last paragraph as I hit "post" too quick)
Will baby #3 be another girl?
]
Well, DH and I had DD when we were 36 and 38. We worked for 13-14 years before she came along. We already had great salaries and lots of money put away in savings/retirement by the time she was born.
Now we have very nicely funded retirement accounts and plenty extra to put away for her college, which we do plan to pay for in full up to an extent. I don't believe in $40K per year educations unless you're going to an Ivy League or other top school.
We move every few years for work, but keep one house that we rent when we're away. I do think that we will pay it off early. Owned it for 8 years and could probably pay it off in another 15.
We will retire early b/c as I said, we have great pensions and large sums in retirement funds, which are funded at 20% of each of our salaries. We're looking at early to mid-50s for retirement. But who knows?
As for college, I went to a $13K a year state school. 50% was paid for with scholarship money, and 50% by my parents. I know not all schools are super expensive. Not even 15 years after I graduated.
I don't think you have to be wealthy for any of this. Just reasonably good with savings and retirements and pick the right career field.
No, we won't be able to pay for private school unless they get scholarships. I think we will be able to save for most of their college and pay for the rest out of pocket when the time comes. They may have to take out a few loans, but hopefully nothing ungodly. We plan to refi this house at 35 and rent it and buy another so both houses will be paid off at 65. Then the plan is to downsize and keep one rental for income. Between that and our 401k I think we'll be able to retire on time, but who really knows, a lot can happen between then and now!
I believe saving is good, but I don't believe in losing your entire quality of life for it. My mom had cancer awhile back and she said it put things in perspective. She could strain herself saving her entire youth only to die at 40. Yes she'd be prepared to retire, but what good is that if she restricted her life so much she didn't live. So she always tells me to do what I can without overindulging or over restricting and to take vacations and experience things with your kids at all ages and stages and don't be afraid to take chances.
Like the previous poster graduating without any debt has allowed me to build healthy savings and retirement accounts. I realize that isn't the norm and am so thankful that my parents were able to do that. my husband and I both work but decided 4 years ago that we would live off his salary. Everything I make goes into savings retirement and a college savings plan for our daughter. There is no way we would be able to do that if we had to make a $1000+ student loan payments every month.
We definitely live a modest lifestyle-no new cars, expensive vacations, smartphones, etc. but these sacrifices are worth it to me. Our home will be paid off in the next two years and our kids will graduate without any debt if they choose a state school.
Yep all of this. So many of these choices people are mentioning are actually inherited from the previous generation.
I came from an upper middle class family. I got a huge scholarship to a private college and my parents easily covered the rest of my tuition, room, board and expenses. They had money left over in my college savings account that I got to start me out after school. It paid my rent until I found a job. I had the freedom to choose a niche nonprofit career and know that my parents would help me if I needed it.
DH's family was not so well off. His parents are blue collar workers. They paid nothing for his college and he had to drop out when he ran out of money. He couldn't get loans then because no one had good enough credit to cosign for him. While working retail in his 20s and trying to save enough to go back to school, he was on food stamps and let his utilities lapse in the summer so he could save a little more.
Fast forward. He now has a high paying job that he landed after he finished his bachelors at 30. We pay the same huge amount each month 3x in rent, day care, and his student loans. We put away a little each month towards an emergency fund. We each have 5 percent taken out of our psyche is for retirement. That's it for savings. We live in a HCOL because it is ground zero for his high paying job. A starter house would be 650K and we have no down payment so forget that. My parents would help us with a down payment but we still couldn't afford the mortgage on top of our debt payments and the teeny bit of saving we do.
We have a great life. If I'd married someone with a background like mine, I'd probably own some property and be fully funding my retirement accounts and I, too, would engage in the conversation about choices we're making to pay for DD's college. But I'm more proud to have married somebody who worked so hard to get out of poverty. I'm grateful for the privilege I had growing up and we'll give DD what we can. I'm MORE grateful that my H has been through it all and can be a model for her of how to persevere. We made our choices to invest in college for H, knowing it would be a long time before we see the returns from that. But his parents made choices too that set us on this track. DD will probably say this one day about us and I hope she says it with the same sense of pride I feel about how far we've come in the 10 years H and I have been together.
I"m not sure of the definition of 'wealthy'. We don't consider ourselves wealthy but we are compared to others. I don't know if I view it as choices, circumstances, but more like a combination. Both our parents paid for us to attend state schools for college, which as pp said, started us off in a good place. I did go to graduate school right after college & took out loans for 3 yrs to pay for the tuition. We did not get married until close to 30 and did make a conscious decision not to try to start a family until mid-30s. I do feel that delaying childbearing helps build that nest egg to make you more financially comfortable, but it isn't how it works for everyone. MH works in a field where they get decent sized lump sum bonuses and we have always used that in a constructive/investment way, not to 'spend' on something-- like one year we paid off the end of my grad school debt, and otherwise it generally goes to our financial advisor who invests it for us. We have not bought houses that are at the high end of what we can afford, more middle to low of what we could technically pay each month so that we can still save AND do things we enjoy like vacations or get things for our kids, though we don't spend irresponsibly. We know plenty of ppl who are in a similar salary range to MH and I combined and live in much bigger/more upscale/etc types of homes and I think they just stretch further. Also we don't drive fancy cars and don't buy a ton of technology type things and go nuts on stuff in our house. It's just not what we're into, I get that other people are & choose to spend in that way.
So yes, I fully expect (unless circumstances change, which they could) to be able to pay for our kids' college. We may tell them they have to go to a state school or we will cover up to X amt &if htey want to go to a really expensive private school they will have to take out loans to cover the difference, we'll see. No hard & fast rules on that- if one of them ends up being extremely passionate & skilled in a particular area that a private school program/degree from a specific place will be a huge asset in their career/life, and they applied themselves & worked hard to get in, I personally would pay for it if we could, vs the kid who just wants to go to some private school b/c it is in a fun city or nice area and has a good name, etc.
Not to sound snarky, but it's called living within your means (which I wish I knew when I was in college, but at least I learned it in my late 20's before it was "too late".
1) We don't finance or lease cars, we pay for them in cash.
2) We don't have any credit cards, so if we don't have the money for it we don't buy it.
3) We live in a HCOL area, but we bought a "fixer upper" that we can expand upon and we learned how to do many renovations ourselves (tiling, demo etc) we do leave the electrical and construction to the professionals though.
4) Budgeting, meal planning, buying in bulk. Our food budget (including paper towels, toilet paper) is $600 per month, and we don't eat a ton of processed foods. We buy in bulk, watch for sales, and buy fresh food (we joined a local CSA this year, and I'm so exited!).
This mentality is why we have survived several lay offs (including DH's lay off for 9 months) and we will be able to put money away for all of our children.
DH and I are not wealthy by any means, but we have learned how NOT to live the "American way" and in the end we will be better off for it. My friends all think I'm crazy, because I can't just buy whatever I want, but when they are saddled with 1K per month of credit card debt and we are going to Disney, we start to sound less crazy.