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Ever since my oldest son started high school, college has been on my mind more and more. I take pleasure in managing my family’s finances, as I’ve always been a number cruncher by profession. But, there are way too many variables and unknowns involved in saving for college, and it’s driving me bananas.
Why Saving for College is a Crapshoot
When my kids were younger, I did some online college savings calculators. At the time, college tuition rates were climbing at ridiculous rates and were expected to keep that trend. Online calculators told me we might need to have $250,000 saved for college by the time my kids graduated high school. Um, right?! I have three kids, so that’s $250k X 3.
Many people in my generation and older say, “Just work through college like I did.” Well, that math doesn’t work anymore.
Until my son gets into at least his junior year of high school, his college costs are really unpredictable. He has so many possible avenues with drastically different costs.
On the low end, my son could live at home and attend our local community college. Our community college has a good reputation and is extremely inexpensive. It even just added a couple of 4-year degrees as well as a trade school/tech campus. Tuition and fees are only $1620 a year, or less than $7000 for four years.
Another option with a somewhat moderate cost is to attend a state university in Texas. These cost $20k-$30k a year including room and board. Some of them offer significant merit scholarships that my kids may qualify for if their grades and SAT/ACT scores are high, which knocks off some of the tuition cost. Texas Tech in particular is very generous with merit scholarships. The total for four years living at a state university could run $50k (on the low end with merit scholarships) up to $120k.
Then of course there are private universities. Most of the time, the inflated sticker price is not the final price. The cost could end up as low as a state university or as high as $300k for four years with no scholarships.
So basically we’re looking at a range of $7k to $300k for each kid. That’s not easy to plan for!
How College Savings Affects Family Travel
Wait, is this a travel blog or a financial blog? Don’t worry, this is still a family travel blog. I do not profess to be a personal finance expert. I’m getting to the travel part.
We’ve been saving for my son’s college since we adopted him at age 3. I’ve shown him how much we have in his 529 account, and I’ve been honest with him what his options will be. We plan to not take out any loans, but we will likely have to cash flow some of his college expenses. And that’s where it impacts family travel.
Even using miles and points, travel isn’t free. Leaving our home for a week always costs us money, even if it’s just food and pet sitting.
My family loves cruising, and that is what is giving me pause. While I think cruising can be a great value, it’s also a big lump sum to pay in cash. And sometimes I wonder, “Should we stay home because we might need that cash to pay a semester’s tuition?”
But, it all comes down to balance. I don’t want to miss traveling with my son during his last years at home. At the same time, we’re not going to splurge on a trip that costs an entire year’s worth of tuition. We can accomplish both family travel and saving for college if we stick to a budget and keep using miles and points to offset some of the cost.
I just wish I could see into the future to know the exact cost. I need numbers to be black and white, not gray! Of course, by his senior year we should have a pretty good idea. But that will be just in time to start the college cost crapshoot for our next kid.
Families with older kids, do you think about college savings vs. vacation spending? How do you balance?
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Author: Nancy
Nancy lives near Dallas, Texas, with her husband and three kids. Her favorite vacations include the beach, cruising and everything Disney.
I think about college costs all the time, but I don’t think of it in relation to travel costs. I MS my way to free trips (including cruises) and keep that money separate from our household finances.
Whoops… forgot to add: Regardless, I completely understand the stress of saving for college. While our plan is state universities, tuition projections vary quite a bit. It feels like a moving target.
@projectx It’s a moving target for sure!
I know Mom’s aren’t usually thrilled by the idea, but you really should look into both ROTC programs and serving in the Army Reserve as enlisted during college. You can get a full to partial scholarship from the former and earn the GI Bill through the latter. As a senior officer, I have had many great Soldiers get their college paid for by one of these two routes.
@Glenn That is a good option for many! My friend’s daughter is doing just that. Unfortunately, two of my kids are disqualified from serving due to medical reasons, so we will push for merit scholarships and in-state tuition.
Back in my day, UT cost $2000 a semester and UT law cost $5000 a semester, but both still offered quite a few scholarships and all of mine were merit based. My all in for 2 years of undergrad and 3 years of law school was around $30,000 after scholarships. Sure, it helped that my parents bought me a condo in west campus and I made money by renting out the spare room.
Now, if my 3 kids go to UT undergrad (hopefully finish in 2 years like me or 3 otherwise) and UT law (which I hope they don’t), I would estimate about $400,000 a kid including living expenses. I was actually advised against 529 plans as withdrawing from them will hurt your kids ability to get grants. I have been doing insurance products. Bought insurance policies for each kid at 1 year old for $20,000/yr per kid for 10 years.
@Hal Those costs are staggering! The tough part about UT is that living expenses in Austin are more than other cities in Texas, so even moving off-campus is still kinda pricey (compared to Lubbock and College Station). But, as you know, UT has a fantastic reputation.
Hi, I think about it all the time. Our oldest graduated from a private college last year. He had excellent merit and was able to graduate with a very small loan that he has already paid off. Our second son just started and declined his expensive dream school for a very reasonable state school in GA. Yes, GA and we are from NH. His GPA put him above average and it’s a great aviation college so he took a chance and it seems to have worked out. They gave him in state tuition so it’s a great value. We have given up travel this year. Instead, we fly him back and forth on holidays. Every extra dime goes into his flight account (studying to be a pilot) and I’m okay with it. Sometimes you have to sacrifice so that your kids get ahead so we will call his college drop off/pick up as “mini vacations” and enjoy life along the way. We have another child who will enter college in three years so I will plan a family trip for her senior year but for now we’re in a holding pattern. Everyone has to do what’s best for their family but honestly the more you save, the better off your kid will be unless you make under 50k a year and expect a Pell grant. Yes, 5% of your savings will count towards your EFC and 20% of your child’s will be calculated so save wisely and in your name not your kids. It’s not just tuition, room, and board – it’s all the extras that add up – books, fees, entertainment, gas if he/she has a car, food if they are cooking for themselves and travel home. Just my two cents….
@Michelle I’m all for making these college drop-offs and visits “mini vacations.” That’s what we’re doing with one this summer.