Final thought on parents putting kids through university...
The cost of post-secondary education is becoming increasingly unreachable for middle-class families. Parents are already struggling just to keep a roof over their heads (mortgage crisis), pay for increasing food and gas costs (neither of which are factored into the inflation numbers we see) while their real wages (after the impact of inflation) are remaining flat. Unemployment remains high and it's understated because it doesn't count those who have given up looking for work. Many of those who are employed are underemployed, creating a whole class of working poor.
Under these kinds of conditions, it's the minority of parents who are ABLE to save enough for their kids' education. In some cases this is due to poor money management (focusing on consumer wants at the expense of savings), but there is a huge percentage of the population who is just getting by. Some still have student loans of their own to pay off when they become parents. When my older kids were first born, we had mortgage costs, high childcare costs (for two children under 2) and had much lower salaries. I started at $50 a month when each were born, and then went to $100….$150…$200+. That wasn't easy times three; it was really hard when I took four years to be at home and we were living on my husband's income. We have always lived BELOW our means, no matter what those means might have been. We've treated savings (retirement and education) as a bill the entire time. We had empty rooms in our house for years, hardly ate out, only took staycations…but we saved. We drive our cars for 10-12 years. We don't buy anything we don't already have the money for. We are very careful shoppers. We don't make any attempt to keep up with others (most of whom have debt and not assets - not a situation to envy). That's what it takes to save up enough for retirement and university, and the only reason we were able to increase savings along the way is because I did well professionally and my income increased dramatically.
If we still had a mortgage or debt payments, I don't think we could have done it. We could have helped, but the rest would have been on them. As it should be, really. Parents make a huge mistake when they forego retirement savings to put their kids through school. Young adults can borrow for college…older adults cannot borrow for retirement. If you haven't saved enough, retirement is going to be very difficult. Being poor sucks, being old and poor is worse. Paying off student debt isn't fun, but there are many decades of income in front of a graduate. Not true for their parents.
I don't think students treat debt seriously enough; too many get their loan or line of credit and treat it like a windfall instead of recognizing that they're really spending their future income. For most, that future income is going to be a lot lower than they're thinking. Every dollar that they spend carelessly now will take more than that from their budget later; loan payments are made from after tax-dollars and the combination of compound interest and time make it hurt even more.
Perhaps this kind of discussion doesn't belong here, but I'm concerned for people when I see how much enabling and impulsive buying goes on and I see references to debt being used to fund it, or spending instead of saving. Ladies and gentlemen, there are NO must haves when it comes to makeup. None. I hope no one takes offence; I've spend my career in financial services and I'm old enough to be the mother of many here on the board. Have fun enjoying makeup, but don't sacrifice your future to do it.
