Race from $2M to $4M...and Beyond!

[Dicey]

This response is mostly to @arcturus, but also to coup and anyone else in their boat. I fully admit I mat be completely out of touch, but I'm taking the plunge anyway, with good intentions, and fingers crossed.

We talk everywhere on this forum about optimization in all aspects of our lives.

Then I see parents allocating/spending massive amounts of money for their children's educations.

The default seems to be, "I'll just keep working..."

Are there not ways to minimize the cost of a college education?

I paid my own way through college and I believe it set me well on my path of fiscal responsibility and even the desire to retire early. Of course, it was in the Stone Ages, when colleges weren't nearly as expensive, but wages were pretty low then, too. I also bought and paid for my own car, without financial assistance from my parents, and took good care of it.

I'll go duck for cover now.

[scottish]

Both our kids went through a STEM program at a Canadian university (one CS, one Engineering).    Part of the program included "co-op terms", where the students are expected to work for a total of 5 academic terms.   The university has a big infrastructure to support this program so it's very functional.    This makes the program a 5 year program instead of a 4 year program, but once they started the paid work terms they were pretty financially self-sufficient.

[BeanCounter]

@Dicey you can come out now. It’s safe.
I respect that everyone’s opinion on paying for college is different but my $0.02 is that I decided a long time ago I would not it education or experiences for my children so that I/we could FIRE. It just doesn’t feel right to me. But I do think there is a happy medium somewhere. The kids can work to pay for their living expenses for example or live at home. Or maybe they are capped at 4-5 years tuition and the rest is on them or at DH’s workplace for an 80% discount.
But I would never want them to make tough educational decisions or work a lot to pay for school and then inherit $2M (each) when we die. That just doesn’t make sense to me.

[tooqk4u22]

PS> I read others saying they just need to "coast" for X more years, and I don't know what to think.  I don't believe I am capable of "coasting" whatever that means.  Which is one of my challenges in this journey.   I'm either all in or I'm out and I'm generally not happy with myself when I'm just doing the minimum to get by.   Maybe I'm missing a chip.

I think I would be good with coasting by working 2-3 days and flexibility to be off for travel but that is not an option in my role, not that it can't be done but that megacorp doesn't know how to evolve.   

[Exflyboy]

@Dicey You are indeed a brave lady and as I have no kids I of course have no opinions...;)


(Mutters under his breath... When I was a kid growing up in the East end of bombed out London we didn't even know what cars were, let alone Parents buying you one! Paying for for after school activities?..Whats the point in going to college unless its for a STEM major that pays for itself, blah, blah and key kids, stay off my lawn!)

[arcturus]

@Dicey you are one of the pillars of the MMM community, no need to duck for cover!  Also, I agree with much of what you say.  My experience has been a mix.  Straight into college was the right choice for two of my children, but for one, it would have certainly been better to either just take a couple gap years or to do technical school.   In retrospect, that would have been by far the better choice.

With the rising costs of college, and the crazy times we're living in (not to offend anyone, but I saw a headline of UPS drivers making $170K with benefits and I'm not saying its a great job, but that just seems a bit rich to this old-timer whose first real job was $20K/yr) I think technical schools are worth very, very serious consideration.   Would do it in a heartbeat if I had a chance to do it over.

[Louise]

But I would never want them to make tough educational decisions or work a lot to pay for school and then inherit $2M (each) when we die. That just doesn’t make sense to me.

I got to go off to college and it was a wonderful experience. I'd like my child to have the same. I agree it doesn't make sense to deny that and inherit money later.

[tooqk4u22]

This response is mostly to @arcturus, but also to coup and anyone else in their boat. I fully admit I mat be completely out of touch, but I'm taking the plunge anyway, with good intentions, and fingers crossed.

We talk everywhere on this forum about optimization in all aspects of our lives.

Then I see parents allocating/spending massive amounts of money for their children's educations.

The default seems to be, "I'll just keep working..."

Are there not ways to minimize the cost of a college education?

I paid my own way through college and I believe it set me well on my path of fiscal responsibility and even the desire to retire early. Of course, it was in the Stone Ages, when colleges weren't nearly as expensive, but wages were pretty low then, too. I also bought and paid for my own car, without financial assistance from my parents, and took good care of it.

I'll go duck for cover now.

You're not wrong. Me and DW paid our own way with loans so I hear you.   For us, it was important to pay some or most of college. But before I FIREd the first time I started looking at college costs and came to the realization that it would be far more than I expected....not a lot of good options in my state and in reality the in state tuition here is about the same as out of state at many other schools.  We ate only paying for 4 years, no bs drifting into 5 bc only took 11 credits or didn't stay on top of stuff.   So goal was to set aside that amount minimally, and we did, then I felt it should be enhanced to allow for option of higher cost out of state schools (think power five) and some mid privates.   So we have done that now since I went back to work. Kids still think there is the lower amount set aside and anything more than that if they desire will have to come from loans for them (my general view for us and others is that 1-1.5x expected fiest year salary in loans is manageable and reasonable to get a degree and besides need something outstanding for forgiveness down the road) so we potentially have a big buffer.

As for why - simply because we did well enough that I didn't feel right about having them take out monstrous size loans that they would take many many years to pay for (even for in state) when for us it meant another 1-2 years of working.  All college funds are split between 529 and taxable accounts for flexibility and are not included in FIRE stash.

There were other reasons I went back to work....inflation and realization that travel budget was lighter than desired and now fixed that too.

So only issues left are (1) accepting uncertainty and that I can't control or mitigate every eventuality and (2) reconciling the spending views between DW and I.....she is definitely more spendy on consumption and going out with friends and I simply don't like to spend (or worry that spending will lead to failure).  There is probably a bit of feeling that I think if we both spend then we will definitely fail.   The fatFIRE budget definitely has room for spending but not enough for thoughtless "retail therapy" or "ladies that lunch" several days a week. Not that she does it all that much but it is so prevalent amongst her social group that it is hard comparatively (why can they do it and i can't) as it would be for most people....even for me lately, so many in that social group have bought their kids new cars, go on $30k multiple trips with several smaller ones in-between and seem to have no limits on spending...so if if I am feeling it then I know it's much worse for FW ( although I think I feel it partly bc she feels it so much).  And not everybody like those on this forum take comfort entirely with the fact that "yeah, but we don't have to work and they will be working forever bc they haven't saved...and their kids will be indebted from school".

First world problems, it will be worked out.

[Dicey]

But I would never want them to make tough educational decisions or work a lot to pay for school and then inherit $2M (each) when we die. That just doesn’t make sense to me.

I got to go off to college and it was a wonderful experience. I'd like my child to have the same. I agree it doesn't make sense to deny that and inherit money later.

I am absolutely not suggesting that children can't(or shouldn't) "go off to college", I'm questioning the amount of $$$$$ many parents, especially mustachian ones, seem to feel obligated to spend.

[arcturus]

@Dicey You are indeed a brave lady and as I have no kids I of course have no opinions...;)


(Mutters under his breath... When I was a kid growing up in the East end of bombed out London we didn't even know what cars were, let alone Parents buying you one! Paying for for after school activities?..Whats the point in going to college unless its for a STEM major that pays for itself, blah, blah and key kids, stay off my lawn!)

haha...I suppose that, if you were giving advice to someone on how to retire early, two of the worst financial decisions you could make  would be (1) to get divorced and (2) to have children.....both cause you to make financial decisions based on emotions.  I'm 0 for 2 on this front  :-).   But with these decisions also come benefits.  All things considered, I feel incredibly fortunate to be where I am, even at my advanced age.

[secondcor521]

@BeanCounter , and folks, this is one of the reasons I would have such a hard time pulling the trigger with dependents who have not yet established their own independence, etc.  My situation is that it is taking much longer on that front than I had anticipated, at the cost of more than $120K above and beyond undergraduate college expenses.  529 accounts are $0.00 at this point, so everything hits 'stache dollars.  Not saying this to discourage anyone, just something to consider - that the brain of a early adult is an interesting mix of chemistry, and it can result in some paths being taken that were not necessarily in the script you wrote.

My discussions with DW of late are contemplating significantly more travel than I had originally planned for.  What I find encouraging is that, in response to this potential budget-busting news, I am finding myself tightening the budget in other areas and reducing aspirations for the retirement dwelling (current house is too large, too expensive - so we know we have to make a change there).  This, versus the alternative of saying, "Ok, I'll just work X more year(s)."

Of course, I'm not the spring chicken that many others on this thread are (I'm 54 with a target age of 56), but I am nevertheless encouraged by my response to this change.  It makes me realize that, despite having a "number" attained or having a spreadsheet that says the money should last until age 88.36752914, at some point you will just have to take a leap of faith and realize that, if you were smart enough to get into this cohort, you're probably going to be smart enough to get early headlights to any "situations" on the horizon and make adjustments accordingly (on either the expense side or the income side). 

Does this mean that I won't fall victim to OMY?   Hard to say for sure, but I'm hopeful that I won't.  Life is too short and I've already delayed this thing long enough with some personal & financial setbacks along the way.   

My 2 cents this morning (takes a sip of coffee), wishing everyone all the best in your journeys!


PS> I read others saying they just need to "coast" for X more years, and I don't know what to think.  I don't believe I am capable of "coasting" whatever that means.  Which is one of my challenges in this journey.   I'm either all in or I'm out and I'm generally not happy with myself when I'm just doing the minimum to get by.   Maybe I'm missing a chip.

As for the first part about unexpected expenses after FIRE:  Yeah, your plans and expenses will change.  Sometimes you'll win, sometimes you'll lose.  I ended up paying for six years of private high school that was not in the plan when I retired.  But my investments are also up over 2x from the day I FIREd.  Worst case planning that most all of us do means that most of the time things will end up better than we expect.

On not coasting:  I didn't coast either.  Full bore up until my FIRE date.  It works fine to do it that way too and I think boils down to personal preference and specific individual circumstances.

[arcturus]

College expenses and health care are my main two variables that make me feel worried about retirement. At 52, I have taken 10 years off working (6 years when my youngest was born, and 4 years after cancer). I am back working part time (well it’s been more like full time the past two months) to pay for the youngest to go to college. The middle one might be taking a gap year, so who know when he will need the $. With the cost of college, I almost wonder if we wouldn’t be better off giving the kids a house vs tuition $.

I totally hear you @couponvan .   Not that I did things this way, but the finance geek in me says that maybe this is a chance to have a discussion with your children about the net present value of a college education and to consider alternatives, such as:  (1) technical school; (2) two years of community college and then a transfer; (3) in-state vs out of state; etc.   I think this is also what @Dicey is saying if I understand her posts correctly.

Again, offering this as advice -- not that I followed it in my situation.   But perhaps it helps you instill some mustachianism into the discussion with your children as they contemplate this next step.    I also think gap year(s) are very wise for those who don't have a clear direction.

[secondcor521]

@Dicey, lots of various opinions on college.

I both am paying for my kids' college *and* paying attention to the costs *and* economizing where reasonable *and* encouraging my kids to consider the marketability of their degree or the financial viability of their plans.

I do think I made a mistake in excessively incentivizing college as a path for my kids.  I told them they could get a job, start a business, go into the military, go to technical school, or go to college after high school, but I heavily incentivized college because that was the path I took and it worked out for me.  Had I to do it over again, I would have evened out my support for the other options.  To the degree you can, I think it's better to try to help the kid figure out what options fit them best from the beginning - otherwise one can throw money and time down the drain while the kid struggles on the wrong path for a while.

[arcturus]

+1 on what @secondcor521 said -- probably more intelligible than my response!  :-)

[ixtap]

PS> I read others saying they just need to "coast" for X more years, and I don't know what to think.  I don't believe I am capable of "coasting" whatever that means.  Which is one of my challenges in this journey.   I'm either all in or I'm out and I'm generally not happy with myself when I'm just doing the minimum to get by.   Maybe I'm missing a chip.

DH's manager and mentor both told him to just cut back if he was so stressed. His mentor once told me he puts a lot of that pressure on himself. One of his mentees was commenting recently about how when he first showed up on her radar, she couldn't understand how he got so much done: he is faster at many of their tasks, but he was also putting in that many hours. Even when the chronic pain started, he might take more time off, but if he was feeling well enough, he would put in the marathons until he just collapsed. With the pain, he was also getting stressed and grouchy. There were a number of fights when he stood me up because "he didn't want to let anyone down." Took a few of those to get through to him that I expect to be treated as well as anyone else in his life.

He went part time a little over a year ago and is just now learning to chip away at some of his work, rather than working all 20 hours in one or two days and then crashing for two or three days. As a matter of fact, his first two weeks "part time" were 60 hour weeks.

He doesn't really need to work at this point. I call it coast FIRE sometimes, but we are just coasting into chubbier and chubbier FIRE, rather than aiming for a goal. We aren't quite ready to move on from where we are. There is so much to do here and we are both working on increasing our strength and stamina to pursue the next stage.  He figures he might as well pad the kitty while we get through this stage. I think it has been good for him to figure out some sense of balance..but then, he hasn't even been this balanced for a whole month just yet...

[EscapeVelocity2020]

@Dicey you are one of the pillars of the MMM community, no need to duck for cover!  Also, I agree with much of what you say.  My experience has been a mix.  Straight into college was the right choice for two of my children, but for one, it would have certainly been better to either just take a couple gap years or to do technical school.   In retrospect, that would have been by far the better choice.

With the rising costs of college, and the crazy times we're living in (not to offend anyone, but I saw a headline of UPS drivers making $170K with benefits and I'm not saying its a great job, but that just seems a bit rich to this old-timer whose first real job was $20K/yr) I think technical schools are worth very, very serious consideration.   Would do it in a heartbeat if I had a chance to do it over.

DS is at a technical school and the value is fantastic.  Learning real world applicable electrical power and controls skills and bombarded with 100k+ job offers, all while paying roughly $5k per semester.  But of course, this all all hindsight.  When he was born, we diligently seeded a 529 and added $400/mo until it hit $100k (thanks rising markets, basically doubling what we contributed).  Even better yet, the left over 529 money can go in to a Roth IRA for him (up to $35k)...

Even having recent experience with everything working out better than expected, I don't know what kind of advice I'd give other people!  I made good decisions 20 years ago and just followed through (I still personally think building up a 529 to something like 80% of a good college education is a good idea) then had a lot of lucky breaks at the end (my son wanting to get a technical degree, Congress changing the 529 rules, etc.)

I do think it is limiting and unfair to expect kids to figure all of life out on their own, without any parental foresight, especially if it is because you are putting your FIRE first and they have to take out massive loans because they don't qualify for aid due to family income.  It is also unfair that college tuition has risen faster than inflation and post-HS degrees are a necessity for many good jobs.   But opinions are like... :)

[arcturus]

PS> I read others saying they just need to "coast" for X more years, and I don't know what to think.  I don't believe I am capable of "coasting" whatever that means.  Which is one of my challenges in this journey.   I'm either all in or I'm out and I'm generally not happy with myself when I'm just doing the minimum to get by.   Maybe I'm missing a chip.

DH's manager and mentor both told him to just cut back if he was so stressed. His mentor once told me he puts a lot of that pressure on himself. One of his mentees was commenting recently about how when he first showed up on her radar, she couldn't understand how he got so much done: he is faster at many of their tasks, but he was also putting in that many hours. Even when the chronic pain started, he might take more time off, but if he was feeling well enough, he would put in the marathons until he just collapsed. With the pain, he was also getting stressed and grouchy. There were a number of fights when he stood me up because "he didn't want to let anyone down." Took a few of those to get through to him that I expect to be treated as well as anyone else in his life.

He went part time a little over a year ago and is just now learning to chip away at some of his work, rather than working all 20 hours in one or two days and then crashing for two or three days. As a matter of fact, his first two weeks "part time" were 60 hour weeks.

He doesn't really need to work at this point. I call it coast FIRE sometimes, but we are just coasting into chubbier and chubbier FIRE, rather than aiming for a goal. We aren't quite ready to move on from where we are. There is so much to do here and we are both working on increasing our strength and stamina to pursue the next stage.  He figures he might as well pad the kitty while we get through this stage. I think it has been good for him to figure out some sense of balance..but then, he hasn't even been this balanced for a whole month just yet...

Wow, this is hitting a bit close to home for me, sans the chronic pain.  Otherwise, I sound a bit like your DH, maybe prior to lessons learned (?).  I would like to think I've gotten a bit better at time balance over the past year or so, but its more than just the hours for me, it's just that it is constantly there in the background of everything I do.  Thank you for your post @ixtap.  Time for me to go away for some introspection I think.

[pecunia]

--SNIP--
I do think it is limiting and unfair to expect kids to figure all of life out on their own, without any parental foresight, especially if it is because you are putting your FIRE first and they have to take out massive loans because they don't qualify for aid due to family income.  It is also unfair that college tuition has risen faster than inflation and post-HS degrees are a necessity for many good jobs.   But opinions are like... :)

I went to college before Reaganomics.  It didn't used to be like this.  It doesn't have to be like this.  Education is supposed to be an investment in the country's future not an investment vehicle for bankers to rob students.

[Exflyboy]

@Dicey you are one of the pillars of the MMM community, no need to duck for cover!  Also, I agree with much of what you say.  My experience has been a mix.  Straight into college was the right choice for two of my children, but for one, it would have certainly been better to either just take a couple gap years or to do technical school.   In retrospect, that would have been by far the better choice.

With the rising costs of college, and the crazy times we're living in (not to offend anyone, but I saw a headline of UPS drivers making $170K with benefits and I'm not saying its a great job, but that just seems a bit rich to this old-timer whose first real job was $20K/yr) I think technical schools are worth very, very serious consideration.   Would do it in a heartbeat if I had a chance to do it over.

DS is at a technical school and the value is fantastic.  Learning real world applicable electrical power and controls skills and bombarded with 100k+ job offers, all while paying roughly $5k per semester.  But of course, this all all hindsight.  When he was born, we diligently seeded a 529 and added $400/mo until it hit $100k (thanks rising markets, basically doubling what we contributed).  Even better yet, the left over 529 money can go in to a Roth IRA for him (up to $35k)...

Even having recent experience with everything working out better than expected, I don't know what kind of advice I'd give other people!  I made good decisions 20 years ago and just followed through (I still personally think building up a 529 to something like 80% of a good college education is a good idea) then had a lot of lucky breaks at the end (my son wanting to get a technical degree, Congress changing the 529 rules, etc.)

I do think it is limiting and unfair to expect kids to figure all of life out on their own, without any parental foresight, especially if it is because you are putting your FIRE first and they have to take out massive loans because they don't qualify for aid due to family income.  It is also unfair that college tuition has risen faster than inflation and post-HS degrees are a necessity for many good jobs.   But opinions are like... :)

I hear you. Its funny because even though I get bombarded with job offers for my engineering skills I find I am equally sought after for just about all of my hands on skills.

I had a friend come round the other day who wanted some ornamental gates welded. He is a contractor and this was for a customer of his. He wasn't confident to make nice pretty welds and as this was going to be on display they had to look good.

OK so I set up my TIG welder as this makes the prettiest welds and went to work.. Took 20 minutes.

I helped him load up and he thrust $200 into my hand.. I protested loudly as this was a simple favour between friends. He said.. "I was quoted $500 for this work and there is no way I could make it look that good.. Besides, you should see what I'm charging for this!"

He also told me he had lots of people he knows who wants this kind of stuff done!.. Naturally I reminded him I don't need the work and I certainly don't need the liability.

Bottom line is I think the average person is a lot more helpless than they were in decades past and skilled trades are benefitting from that fact. So $5k a semester for a two year technical qualification is a bargain.

[Dicey]

My nephew was building complicated things when he was a toddler. He went to trade school at the local junior college to become a contractor. He is now a GC with his own firm. His house needed extensive renovation and regrading before he could live in it. He had it paid off before he moved in. He buys and sells trucks for a profit, so he is always ready to be a cash buyer when he finds a deal. He has no debt of any kind and is far ahead of his peers at age 30.

[Fomerly known as something]

@BeanCounter , and folks, this is one of the reasons I would have such a hard time pulling the trigger with dependents who have not yet established their own independence, etc.  My situation is that it is taking much longer on that front than I had anticipated, at the cost of more than $120K above and beyond undergraduate college expenses.  529 accounts are $0.00 at this point, so everything hits 'stache dollars.  Not saying this to discourage anyone, just something to consider - that the brain of a early adult is an interesting mix of chemistry, and it can result in some paths being taken that were not necessarily in the script you wrote.

My discussions with DW of late are contemplating significantly more travel than I had originally planned for.  What I find encouraging is that, in response to this potential budget-busting news, I am finding myself tightening the budget in other areas and reducing aspirations for the retirement dwelling (current house is too large, too expensive - so we know we have to make a change there).  This, versus the alternative of saying, "Ok, I'll just work X more year(s)."

Of course, I'm not the spring chicken that many others on this thread are (I'm 54 with a target age of 56), but I am nevertheless encouraged by my response to this change.  It makes me realize that, despite having a "number" attained or having a spreadsheet that says the money should last until age 88.36752914, at some point you will just have to take a leap of faith and realize that, if you were smart enough to get into this cohort, you're probably going to be smart enough to get early headlights to any "situations" on the horizon and make adjustments accordingly (on either the expense side or the income side). 

Does this mean that I won't fall victim to OMY?   Hard to say for sure, but I'm hopeful that I won't.  Life is too short and I've already delayed this thing long enough with some personal & financial setbacks along the way.   

My 2 cents this morning (takes a sip of coffee), wishing everyone all the best in your journeys!


PS> I read others saying they just need to "coast" for X more years, and I don't know what to think.  I don't believe I am capable of "coasting" whatever that means.  Which is one of my challenges in this journey.   I'm either all in or I'm out and I'm generally not happy with myself when I'm just doing the minimum to get by.   Maybe I'm missing a chip.

For me coasting is in my job, some things are very important.  I still am all in on the very important.  Some things, management says are important, but by their actions (priorities) they are clearly not important.  So I don’t worry about the unimportant things no matter how much they are talked about.

[Exflyboy]

My nephew was building complicated things when he was a toddler. He went to trade school at the local junior college to become a contractor. He is now a GC with his own firm. His house needed extensive renovation and regrading before he could live in it. He had it paid off before he moved in. He buys and sells trucks for a profit, so he is always ready to be a cash buyer when he finds a deal. He has no debt of any kind and is far ahead of his peers at age 30.

Exactly! There is more than one way up the greasy pole of success. I think if I had my time now I probably woudn't go to college unless I could be sure the returns were there. Not wishing to offend, but I just can't see the point in spending $80k on a social studies degree just to end up flipping hamburgers! I know there is such a thing as the college experience which some find valuable. For me doing engineering my experience was to be so freaking busy as to not have too much time to enjoy it. Certainly my sex life in college was non existent..:)

It seems as time goes on the average person is becoming more and more helpless (calling a tow truck for a flat tire etc) so in theory hands on skills will continue to be valuable. Just today I saw a dealer quoted $1000 to change a water pump on the same car I have.... WTF?.. I did the same job a few months back, took me 1.5 hours!

Having said that, its hard to know what the future holds, its could be the market for trade skills takes a dump and then the only way to get ahead is to have a degree.

[dividendman]

In the same vein as having some "skills", I don't think I'm very handy. FIRED now, worked a desk tech job before I retired.

But... we bought a fancy fridge for our outside area and it conked out (I think due to a little flooding we had) right after the manufacturer's warranty expired. People wanted $200 just to come out to look at it, never mind repair it. So, I'm like... I'm retired and think I'm fairly smart, how hard can it be to fix a fucking fridge?

Bought a multimeter, learned about compressors (and thermistor, capacitors, start relays etc. that help it), and how the fridge circuit boards worked. Took the fridge apart, tested various parts. Bought a soldering kit once I realized it was the main circuit board that actually had a bunch of corrosion. It took me a month (mostly waiting for parts) but I fixed it. Total cost < $150 including all the new tools and parts.

At this point I'm not willing to buy new or hire a repair person for any appliance. Fuck these prices man, I don't care how much money I have. I have time and I can learn. I hate the ripoff factor more than anything.

[EscapeVelocity2020]

In the same vein as having some "skills", I don't think I'm very handy. FIRED now, worked a desk tech job before I retired.

But... we bought a fancy fridge for our outside area and it conked out (I think due to a little flooding we had) right after the manufacturer's warranty expired. People wanted $200 just to come out to look at it, never mind repair it. So, I'm like... I'm retired and think I'm fairly smart, how hard can it be to fix a fucking fridge?

Bought a multimeter, learned about compressors (and thermistor, capacitors, start relays etc. that help it), and how the fridge circuit boards worked. Took the fridge apart, tested various parts. Bought a soldering kit once I realized it was the main circuit board that actually had a bunch of corrosion. It took me a month (mostly waiting for parts) but I fixed it. Total cost < $150 including all the new tools and parts.

At this point I'm not willing to buy new or hire a repair person for any appliance. Fuck these prices man, I don't care how much money I have. I have time and I can learn. I hate the ripoff factor more than anything.

Better yet, now you can go charge your neighbors $200/hr to fix their fridges LOL!

That's exactly the kind of work my son is learning and he loves it.  It amazes me how different we are, he fiddles soldering circuit boards and playing with multimeters, hacking together handheld gaming devices and PLC gizmos...  he is actually a lot like my father in law...

My daughter just got accepted today to a more traditional 4 year college.  So yeah, it's so unpredictable and, as a parent, you are supposed to make plans decades before college as if you know anything about how much it is going to cost!

I went to college before Reaganomics.  It didn't used to be like this.  It doesn't have to be like this.  Education is supposed to be an investment in the country's future not an investment vehicle for bankers to rob students.

Many other countries heavily subsidize or make college outright free.  It is a gift to the country to have an educated, skilled workforce...  it makes no sense the way capitalism has turned college in to a profitable enterprise.  Somehow it still manages to work, a US college degree is highly regarded globally, but the price colleges can demand is outrageous.  I'm waiting for something to break at some point.

[pecunia]

In the same vein as having some "skills", I don't think I'm very handy. FIRED now, worked a desk tech job before I retired.

But... we bought a fancy fridge for our outside area and it conked out (I think due to a little flooding we had) right after the manufacturer's warranty expired. People wanted $200 just to come out to look at it, never mind repair it. So, I'm like... I'm retired and think I'm fairly smart, how hard can it be to fix a fucking fridge?

Bought a multimeter, learned about compressors (and thermistor, capacitors, start relays etc. that help it), and how the fridge circuit boards worked. Took the fridge apart, tested various parts. Bought a soldering kit once I realized it was the main circuit board that actually had a bunch of corrosion. It took me a month (mostly waiting for parts) but I fixed it. Total cost < $150 including all the new tools and parts.

At this point I'm not willing to buy new or hire a repair person for any appliance. Fuck these prices man, I don't care how much money I have. I have time and I can learn. I hate the ripoff factor more than anything.

To play the devil's advocate, if you had paid yourself, what would it have cost? 

Just the same, I'm like you.  Lightning or something zapped my fridge last month.  After studying several You Tube videos and downloading a few diagrams I fixed it myself.  Besides the savings, I felt great satisfaction when that fridge started up.

When I was a kid I had a conversation with my dad.  We didn't have a lot of money so we fixed everything ourselves.  I remember discussing fixing some old appliance at the time and asking my dad why we just didn't buy a new one.  My father replied, "Anyone can buy new."  It's taken years for that to truly make sense to me.  This was long before this "recycling" was considered good for the Earth.  Not everyone can fix this stuff.

[dividendman]

In the same vein as having some "skills", I don't think I'm very handy. FIRED now, worked a desk tech job before I retired.

But... we bought a fancy fridge for our outside area and it conked out (I think due to a little flooding we had) right after the manufacturer's warranty expired. People wanted $200 just to come out to look at it, never mind repair it. So, I'm like... I'm retired and think I'm fairly smart, how hard can it be to fix a fucking fridge?

Bought a multimeter, learned about compressors (and thermistor, capacitors, start relays etc. that help it), and how the fridge circuit boards worked. Took the fridge apart, tested various parts. Bought a soldering kit once I realized it was the main circuit board that actually had a bunch of corrosion. It took me a month (mostly waiting for parts) but I fixed it. Total cost < $150 including all the new tools and parts.

At this point I'm not willing to buy new or hire a repair person for any appliance. Fuck these prices man, I don't care how much money I have. I have time and I can learn. I hate the ripoff factor more than anything.

To play the devil's advocate, if you had paid yourself, what would it have cost? 

Just the same, I'm like you.  Lightning or something zapped my fridge last month.  After studying several You Tube videos and downloading a few diagrams I fixed it myself.  Besides the savings, I felt great satisfaction when that fridge started up.

When I was a kid I had a conversation with my dad.  We didn't have a lot of money so we fixed everything ourselves.  I remember discussing fixing some old appliance at the time and asking my dad why we just didn't buy a new one.  My father replied, "Anyone can buy new."  It's taken years for that to truly make sense to me.  This was long before this "recycling" was considered good for the Earth.  Not everyone can fix this stuff.

Yeah it felt great when the compressor started and the fridge cooled. If I paid myself what I made hourly at my peak... it would have been in the thousands... haha. But I don't make that now obviously. Maybe I'm getting old but I'm sick of all the rip offs. Restaurants are almost totally out now too since I retired. I feel like the prices have gone up and the service/quality has gone down. I can cook food better than all of these restaurants, have the time to do it, it's not a ripoff, and it's generally healthier.

YouTube is the best for all of this. Cooking, repairs, etc. So much info especially how two make great gourmet meals! The best part is I'm enjoying cooking more and more, and now that I have that one repair under my belt I'm looking forward to the next one.

[Fomerly known as something]

As the proud owner of a political science degree.  I’m obviously not flipping burgers.  I had some STEM classes, but that’s it.  If I were to go back and do it again, I’d likely study Geology, which would probably = less in salary than my Law enforcement job, that has nothing to do with my degree.  I’m a firm believer that going to University is not trade school.  You don’t have to necessarily study your career but the schooling does give you skills that help you in the career you end up in.

On the other hand since my parent paid for most of my schooling (minus books and incidentals like Friday pizza), I made sure I graduated in 4 years, even though I fell in love with Geology as a Junior.  No changing majors for me, I wouldn’t have graduated in 4 years.

[EscapeVelocity2020]

In the same vein as having some "skills", I don't think I'm very handy. FIRED now, worked a desk tech job before I retired.

But... we bought a fancy fridge for our outside area and it conked out (I think due to a little flooding we had) right after the manufacturer's warranty expired. People wanted $200 just to come out to look at it, never mind repair it. So, I'm like... I'm retired and think I'm fairly smart, how hard can it be to fix a fucking fridge?

Bought a multimeter, learned about compressors (and thermistor, capacitors, start relays etc. that help it), and how the fridge circuit boards worked. Took the fridge apart, tested various parts. Bought a soldering kit once I realized it was the main circuit board that actually had a bunch of corrosion. It took me a month (mostly waiting for parts) but I fixed it. Total cost < $150 including all the new tools and parts.

At this point I'm not willing to buy new or hire a repair person for any appliance. Fuck these prices man, I don't care how much money I have. I have time and I can learn. I hate the ripoff factor more than anything.

To play the devil's advocate, if you had paid yourself, what would it have cost? 

Just the same, I'm like you.  Lightning or something zapped my fridge last month.  After studying several You Tube videos and downloading a few diagrams I fixed it myself.  Besides the savings, I felt great satisfaction when that fridge started up.

When I was a kid I had a conversation with my dad.  We didn't have a lot of money so we fixed everything ourselves.  I remember discussing fixing some old appliance at the time and asking my dad why we just didn't buy a new one.  My father replied, "Anyone can buy new."  It's taken years for that to truly make sense to me.  This was long before this "recycling" was considered good for the Earth.  Not everyone can fix this stuff.

Yeah it felt great when the compressor started and the fridge cooled. If I paid myself what I made hourly at my peak... it would have been in the thousands... haha. But I don't make that now obviously. Maybe I'm getting old but I'm sick of all the rip offs. Restaurants are almost totally out now too since I retired. I feel like the prices have gone up and the service/quality has gone down. I can cook food better than all of these restaurants, have the time to do it, it's not a ripoff, and it's generally healthier.

YouTube is the best for all of this. Cooking, repairs, etc. So much info especially how two make great gourmet meals! The best part is I'm enjoying cooking more and more, and now that I have that one repair under my belt I'm looking forward to the next one.

Not sure if folks here have heard of the EU's "right to repair" laws, but some bad actors (Apple) intentionally make their products impossible for consumers to repair.  This trend is both terrible for consumers and for the environment.  But there is some good news on the horizon (by 2027 hopefully) - EU Just Changed Smartphones Forever

[itchyfeet]

When I left high school I had no idea what I wanted to do, other than I knew I didnt want to be a lawyer as it seemed exceptionally boring work. So I headed off to university to get a business degree that I felt would assist my employability wherever I might end up. Engineering seemed like to much effort.

My parents didnt have money to fund my education, and I liked the freedom of my car and travel, so I had to get a job straight out of high school. I did some labouring work, washed busees, and then got a junior desk job at the local Council. I then obtained my undergrade degree at night school and continued on to post grad, also at night school. it ended up being 8 years of part time study all up.

I have no regrets in the time and financial commitment I made to my studies in my 20s.

I am pretty certain I would not have earned anywhere near what I earned over my career if I had taken up a trade. With 2 left thumbs I would not have been much or a tradesman.

I guess I would have quickly had to become a business owner, as that is probably all I could have done effectively to earn a decent income. Definitely this could have been a more interesting path, but I have been happy to have taken the safe route looking back.

[pecunia]

When I left high school I had no idea what I wanted to do, other than I knew I didnt want to be a lawyer as it seemed exceptionally boring work. So I headed off to university to get a business degree that I felt would assist my employability wherever I might end up. Engineering seemed like to much effort.

My parents didnt have money to fund my education, and I liked the freedom of my car and travel, so I had to get a job straight out of high school. I did some labouring work, washed busees, and then got a junior desk job at the local Council. I then obtained my undergrade degree at night school and continued on to post grad, also at night school. it ended up being 8 years of part time study all up.

I have no regrets in the time and financial commitment I made to my studies in my 20s.

I am pretty certain I would not have earned anywhere near what I earned over my career if I had taken up a trade. With 2 left thumbs I would not have been much or a tradesman.

I guess I would have quickly had to become a business owner, as that is probably all I could have done effectively to earn a decent income. Definitely this could have been a more interesting path, but I have been happy to have taken the safe route looking back.

Probably made the right choice.  Quite a number of times, I've seen companies strip themselves of dozens of engineers.  I've not heard of accountants or similar bean counters laid off.  You were wise to get your hands close to the purse strings.

[2sk22]

Since we are talking about careers: many of my ancestors were either engineers or professors of mathematics (my dad, who was an accountant, was a bit of an outlier 😀). To no one's surprise, I started playing around with electronics from an early age. I was building logic circuits with relays by the time I was 13. I used to read a lot of science fiction and decided that I wanted to work in AI. Big influences were the classic The Moon is a Harsh Mistress by Robert Heinlein and the nonfiction book Soul of a New Machine by Tracy Kidder.

Spent much of my college years programming everything from a PDP-8 to our university mainframe. Neural networks sounded like fun so I dug into it and did my PhD in machine learning. But when it came to look for a job, I discovered that almost nobody outside a small circle in academia knew what a neural network was. So I worked in other areas of computer science until machine learning took off which was around 2009. So I owe my fortune to knowing a bit of linear algebra and calculus 😀

[pecunia]

Since we are talking about careers: many of my ancestors were either engineers or professors of mathematics (my dad, who was an accountant, was a bit of an outlier 😀). To no one's surprise, I started playing around with electronics from an early age. I was building logic circuits with relays by the time I was 13. I used to read a lot of science fiction and decided that I wanted to work in AI. Big influences were the classic The Moon is a Harsh Mistress by Robert Heinlein and the nonfiction book Soul of a New Machine by Tracy Kidder.

Spent much of my college years programming everything from a PDP-8 to our university mainframe. Neural networks sounded like fun so I dug into it and did my PhD in machine learning. But when it came to look for a job, I discovered that almost nobody outside a small circle in academia knew what a neural network was. So I worked in other areas of computer science until machine learning took off which was around 2009. So I owe my fortune to knowing a bit of linear algebra and calculus 😀

All of that was a while ago.  Sounds like the punch card days.  PDP-8 was released in the mid sixties.  Those minicomputer companies vanished at the end of the last century.  You got into a good thing at the right time.

[2sk22]

All of that was a while ago.  Sounds like the punch card days.  PDP-8 was released in the mid sixties.  Those minicomputer companies vanished at the end of the last century.  You got into a good thing at the right time.

That PDP-8 was already ancient even in the 1980s when I was in college! I wrote some programs on it to help out a friend who was doing a project that used the PDP-8 as an instrument controller (mass spectrometer I think).

Even as late as the 80s, CS was not a obvious slam dunk choice as a career. You could made a decent living but not crazy money. That started only after the dot-com bubble.

[catccc]

This response is mostly to @arcturus, but also to coup and anyone else in their boat. I fully admit I mat be completely out of touch, but I'm taking the plunge anyway, with good intentions, and fingers crossed.

We talk everywhere on this forum about optimization in all aspects of our lives.

Then I see parents allocating/spending massive amounts of money for their children's educations.

The default seems to be, "I'll just keep working..."

Are there not ways to minimize the cost of a college education?

I paid my own way through college and I believe it set me well on my path of fiscal responsibility and even the desire to retire early. Of course, it was in the Stone Ages, when colleges weren't nearly as expensive, but wages were pretty low then, too. I also bought and paid for my own car, without financial assistance from my parents, and took good care of it.

I'll go duck for cover now.

I am absolutely not suggesting that children can't(or shouldn't) "go off to college", I'm questioning the amount of $$$$$ many parents, especially mustachian ones, seem to feel obligated to spend.

I paid my own way through college, too, but that was 2003.  I worked 3 jobs and took the initiative to negotiate a needs based athletic scholarship from administration for a club sport.  (I can't join the team; I'll have to spend my time working unless I get $x,xxx!)  Yes, good on us... 

But I do think this is "completely out of touch."  Here's why:

It's very well known that college costs have soared.  It's extraordinary and excessive, multiple times over the rate of inflation.  So it really doesn't matter when you say "but wages were pretty low then."  Annual inflation from 2010 to 2022 was under 3%.  In that same time period, college tuition increased ~12% annually. Compounded, that's a huge difference, and that's just the last 12 years. It isn't getting better, and my kids are not slated to reach college age for another 4 & 6 years.  This is why we need to save $$$$$ instead of just $$.  Additionally, the value of a college degree has fallen.  You are expected to have one for most jobs; it's the new high school degree.  In 1978, 28% of jobs required a college degree.  Today, 75% of new jobs require one. 

It's a double whammy that older generations sometimes can't seem to wrap their head around.

Sure, there are definitely other options to have a good career without a college degree.  Trades are a great option, they are under demanded careers and over demanded services.  But not every kid wants to be a plumber, electrician, or other tradesperson.  You can only guess at what their education needs will be and plan accordingly.  Less than 20% of high school grads go to trade schools, over 60% of them attend college.  So we know the odds and the logical thing to do is save for college.

There are a lot of parents today that were saddled with the poor fortune of relying on student loans due to lack of savings to address outrageous tuition bills. They then struggle to get out from under student loans.  Those that are able to pay off their loans and have the means are often very dedicated to avoiding such situations once they have their own children. 

I'm not here to make my kids' lives easy, but college tuition is a monster these days, and until there is systemic change to rectify this, many of us feel it is a priority to address with the means we have.  Especially in the FIRE community.  I think another poster mentioned that it doesn't sit well with them to aim for FIRE and not strongly address the education needs of their child.  To tell my kid I can't help more with tuition because I got tired of working when I was 43 doesn't feel right to me.  Since I don't set tuition rates, that means saving $$$$$.

[farmecologist]

This response is mostly to @arcturus, but also to coup and anyone else in their boat. I fully admit I mat be completely out of touch, but I'm taking the plunge anyway, with good intentions, and fingers crossed.

We talk everywhere on this forum about optimization in all aspects of our lives.

Then I see parents allocating/spending massive amounts of money for their children's educations.

The default seems to be, "I'll just keep working..."

Are there not ways to minimize the cost of a college education?

I paid my own way through college and I believe it set me well on my path of fiscal responsibility and even the desire to retire early. Of course, it was in the Stone Ages, when colleges weren't nearly as expensive, but wages were pretty low then, too. I also bought and paid for my own car, without financial assistance from my parents, and took good care of it.

I'll go duck for cover now.

I am absolutely not suggesting that children can't(or shouldn't) "go off to college", I'm questioning the amount of $$$$$ many parents, especially mustachian ones, seem to feel obligated to spend.

I paid my own way through college, too, but that was 2003.  I worked 3 jobs and took the initiative to negotiate a needs based athletic scholarship from administration for a club sport.  (I can't join the team; I'll have to spend my time working unless I get $x,xxx!)  Yes, good on us... 

But I do think this is "completely out of touch."  Here's why:

It's very well known that college costs have soared.  It's extraordinary and excessive, multiple times over the rate of inflation.  So it really doesn't matter when you say "but wages were pretty low then."  Annual inflation from 2010 to 2022 was under 3%.  In that same time period, college tuition increased ~12% annually. Compounded, that's a huge difference, and that's just the last 12 years. It isn't getting better, and my kids are not slated to reach college age for another 4 & 6 years.  This is why we need to save $$$$$ instead of just $$.  Additionally, the value of a college degree has fallen.  You are expected to have one for most jobs; it's the new high school degree.  In 1978, 28% of jobs required a college degree.  Today, 75% of new jobs require one. 

It's a double whammy that older generations sometimes can't seem to wrap their head around.

Sure, there are definitely other options to have a good career without a college degree.  Trades are a great option, they are under demanded careers and over demanded services.  But not every kid wants to be a plumber, electrician, or other tradesperson.  You can only guess at what their education needs will be and plan accordingly.  Less than 20% of high school grads go to trade schools, over 60% of them attend college.  So we know the odds and the logical thing to do is save for college.

There are a lot of parents today that were saddled with the poor fortune of relying on student loans due to lack of savings to address outrageous tuition bills. They then struggle to get out from under student loans.  Those that are able to pay off their loans and have the means are often very dedicated to avoiding such situations once they have their own children. 

I'm not here to make my kids' lives easy, but college tuition is a monster these days, and until there is systemic change to rectify this, many of us feel it is a priority to address with the means we have.  Especially in the FIRE community.  I think another poster mentioned that it doesn't sit well with them to aim for FIRE and not strongly address the education needs of their child.  To tell my kid I can't help more with tuition because I got tired of working when I was 43 doesn't feel right to me.  Since I don't set tuition rates, that means saving $$$$$.

I agree with you...the "I paid my own way through college" argument many older folks bring up is completely out of touch these days.

I'm old too ( GenX'er ), but I'm seeing the struggle firsthand as my kids are now in the midst of college and will both be finishing up this year ( thank god ).   My wife and I were able to pay our own way through college with just a simple summer job...and very modest contributions from our parents.  No loans at all.   And we attended a state university.   This was in the early 1990s.

This just isn't anywhere near attainable anymore.  Our kids attend the same state university that we did.  Unfortunately, summer jobs are literally a drop in the bucket compared to the cost of college.  Summer jobs allow our kids to pay a portion of their living expenses, and part of their rent, but that's about it.   Fortunately, we set up 529 accounts when they were young in anticipation, but the amount we have in there still doesn't cover everything....not even close.  And like I said...they attend a state university...not some even more obscenely priced private college.

It really is sad and ridiculous.   Add predatory student loan rates into the mix, and you have a recipe for disaster, as we are seeing.  Scholarships are not keeping up with inflation either...and this is very important.  Many kids get 'scholarships', but they also end up being a drop in the bucket.   Fortunately, we should be able to get our kids out with minimal loans, but it certainly is costing us more than I calculated all those years ago.

I should add that my daughter is getting her masters degree this year and this will likely be the end of her college career.  She intends to be a therapist in a youth social work type of job.  Yes, she knows she won't get paid all that much, but it is her calling.  The unfortunate thing is that you DO need at least a masters degree for nearly all of the roles she is interested in.

My son is on the STEM path...currently finishing up a double major in Physics and Astrophysics, and is doing quite well.   He is on the graduate school ( PhD program ) path.  The nice thing about graduate school in many of the basic sciences is that you can often get it paid for...plus stipend.  The caveat is that you have to do very well during your undergrad career though...and quite a few don't make it.  We are hoping he can land a grad school gig.

[pecunia]

So,.......college costs a lot more,........kids can't get jobs that pay enough to pay the tuition,........banks charge high interest rates to these kids to go to school & I guess even bankruptcy won't get them out of it.    But the system certainly isn't rigged it's just a natural progression of a Capitalist economy,........right.

[MaybeBabyMustache]

On the college side, it is out of touch. What was reasonable when I went to college (1994) is totally unreasonable now for the reasons already listed above (cost of college, as the primary starting point) & our income/assets (and, I'm guessing most MMM folks) is completely different than my parents income. As a result, I received a tremendous amount of financial aid, and my kids will receive zero need based aid. It would be pretty selfish (in our situation) to not save for college, knowing our income & assets will penalize our kids in the financial aid process. Obviously, in our situation, because everyone has their own unique financial priorities to worry about.

[Turtle]

@Dicey You are indeed a brave lady and as I have no kids I of course have no opinions...;)


(Mutters under his breath... When I was a kid growing up in the East end of bombed out London we didn't even know what cars were, let alone Parents buying you one! Paying for for after school activities?..Whats the point in going to college unless its for a STEM major that pays for itself, blah, blah and key kids, stay off my lawn!)

haha...I suppose that, if you were giving advice to someone on how to retire early, two of the worst financial decisions you could make  would be (1) to get divorced and (2) to have children.....both cause you to make financial decisions based on emotions.  I'm 0 for 2 on this front  :-).   But with these decisions also come benefits.  All things considered, I feel incredibly fortunate to be where I am, even at my advanced age.

0 for 2 on those here as well.  Fortunately my children who were interested in college both decided on a State school with a good reputation and affordable price tag.  They did need to take out loans, but one child has paid them off already and the other has paid off the higher interest private ones already as well. 

[jeroly]

I really don't have a clue as to what my parents would have decided to pay for versus requiring me to take out loans for when I was applying in 1976, had I not wound up going to a super-cheap (albeit not a commuter school for me) college that probably cost  (all-in) the equivalent of $20-25k/yr in 2023 dollars that they paid for.  In any event I was the beneficiary of my parents' generosity and while I did have some college jobs and take out some minor loans, I definitely did not 'pay my way' nor did I expect our daughter to do so.  My ex, on the other hand, got very little financial (they let her live in their home while she got her AA) and less emotional support from her family - she was the very first in her family to go to college at all (and to her great credit, went on to get various professional degrees as well as a Ph.D.!) and definitely 'paid her own way.'

My ex and I took the following approach with our daughter: We would be willing to pay up all costs, including on-campus residence, at any state college where the tuition was under $20k - this was when Michigan and perhaps other states had started soaking out-of-staters with ~$45k/yr tuition for undergrad, but many other states had more reasonable surcharges.  We'd also pay if she went to an elite institution that was arguably 'worth it' in future prospects, either academic or for earnings potential.

As things transpired she was not particularly academically inclined in high school...after graduating HS she started at a commuter college, then transferred to a state college where she lived on-campus, became more focused in her studies, and graduated... without loans. Our costs started lower the first year thanks to commuting, and then went up to about $20k/yr (around $30k/yr now, based on what I see on the SUNY webpage).

As far as the 'I paid MY way through college' thing goes...

We all have been benefitting from lower tax rates in our working lives versus what were extant in our childhood - for example when i went to college in 1976,  the marginal tax rate was 28% for a MFJ income of $18,500 (equivalent to $100,000 today).  Now, the marginal tax rate is 22% for MFJ income of $100,000.  That reduction in federal revenue has almost certainly led to reduced revenue sharing with states, which in turn pressures them not only to increase state college tuition, but to build enough new schools and classrooms.

When you couple the price pressure on one side and couple it with increased demand (both more kids and a higher percentage of them wanting to go to college), you get a surge in prices beyond what inflation alone would have driven; this is exactly what has indeed happened - costs are way higher now.  So anyone thinking about their ability to pay their own costs way back when, versus what is involved now, is not comparing apples to apples.

However, if you took that $6k in tax reductions [(28-22)x100k], saved it over your working lifetime, and saved it each year, and then took the proceeds and applied it to your kids' college costs, I'm pretty confident that they could 'pay their way' through the rest of the costs.  So declining to do at least that for your kids is on some level... making your children pay for your lifestyle.

[baludon]

I took loans to pay for college as I didn’t get any help. This was early 90s and I remember thinking how expensive it was then. I graduated with about $20,000 in student loans which I thought was a lot. But I had a job after graduation and was confident I could pay it off. Of course I had to buy a new truck.  I did not start my working career off in good financial footing. But 25 years later, I’m retired and the truck still runs well.

I had a friend who was prepared to pay something like $50,000 a year in case his daughter goes to a small private liberal arts college. His daughter wanted to be an elementary teacher. She did not have good grades in high school. We discussed that maybe an inexpensive state college would be a better choice knowing that a teacher’s salary paid peanuts. But he and his wife were resigned to pay the $200,000 cost and hoped that it will work out somehow. Luckily for them, his daughter decided to join the navy after high school. He was quite relieved.

[rockstache]

I’ve heard a lot of people talk about the community college/then transfer route too. But some colleges have now gotten wise to that and don’t accept transfer credits for accredited schools in their area. When I transferred I received basically the equivalent of an associates. My younger friend who went back to school at a different state school after taking a little time off? They refused to give her a single credit. We had taken all the exact same classes.

Obviously if that’s a track anyone chooses to take, it’s on them to determine that it’s a viable path before they start. But we can’t overstate the fact that they can change the rules anytime they want to. It’s a gamble.

[SwordGuy]

However, if you took that $6k in tax reductions [(28-22)x100k], saved it over your working lifetime, and saved it each year, and then took the proceeds and applied it to your kids' college costs, I'm pretty confident that they could 'pay their way' through the rest of the costs.  So declining to do at least that for your kids is on some level... making your children pay for your lifestyle.

Good analysis except for those who never made the equivalent of $100k per year, or anywhere near that.

[secondcor521]

I’ve heard a lot of people talk about the community college/then transfer route too. But some colleges have now gotten wise to that and don’t accept transfer credits for accredited schools in their area. When I transferred I received basically the equivalent of an associates. My younger friend who went back to school at a different state school after taking a little time off? They refused to give her a single credit. We had taken all the exact same classes.

Obviously if that’s a track anyone chooses to take, it’s on them to determine that it’s a viable path before they start. But we can’t overstate the fact that they can change the rules anytime they want to. It’s a gamble.

It's also more difficult to get scholarships as a junior transfer vs. an incoming freshman.  At least in my family's experience.

[ATtiny85]

…

I had a friend who was prepared to pay something like $50,000 a year in case his daughter goes to a small private liberal arts college. His daughter wanted to be an elementary teacher. She did not have good grades in high school. We discussed that maybe an inexpensive state college would be a better choice knowing that a teacher’s salary paid peanuts. But he and his wife were resigned to pay the $200,000 cost and hoped that it will work out somehow. Luckily for them, his daughter decided to join the navy after high school. He was quite relieved.

They dodged a bullet from a gun they loaded, removed the safety on,  and stepped in front of.

I support people paying high costs for school unnecessarily. I appreciate others being stuck in their jobs paying FICA for an extra decade or two.

I’ve heard a lot of people talk about the community college/then transfer route too. But some colleges have now gotten wise to that and don’t accept transfer credits for accredited schools in their area. When I transferred I received basically the equivalent of an associates. My younger friend who went back to school at a different state school after taking a little time off? They refused to give her a single credit. We had taken all the exact same classes.

Obviously if that’s a track anyone chooses to take, it’s on them to determine that it’s a viable path before they start. But we can’t overstate the fact that they can change the rules anytime they want to. It’s a gamble.

It's also more difficult to get scholarships as a junior transfer vs. an incoming freshman.  At least in my family's experience.

Ugh, if both these points are broadly true, that really sucks. The junior college  route was such a great technique. Two of my best friends did this. They are both way sharper than I could ever hope to be. I was on a four year ROTC scholarship so went direct to four year. So that’s my excuse.

[catccc]

However, if you took that $6k in tax reductions [(28-22)x100k], saved it over your working lifetime, and saved it each year, and then took the proceeds and applied it to your kids' college costs, I'm pretty confident that they could 'pay their way' through the rest of the costs.  So declining to do at least that for your kids is on some level... making your children pay for your lifestyle.

Good analysis except for those who never made the equivalent of $100k per year, or anywhere near that.

Yes, and also these are marginal rates, so even if you earned $100k, the delta in taxes would not be anywhere close to $6k, it would be $200.  For 2023, the top marginal rate for income after deductions of $100k is 24% and it only applies to about $5k of the $100k. (95K is subject to rates of 10, 12, or 22%) Versus 28%, you are looking at a savings of $200.  $200 a year isn’t going to make a big impact.  Also, pre-1986, personal interest like credit cards and auto loans were tax deductible, the rates are just one part of the tax code.

Anyway, I don’t think it is reduced tax rates that making schools more expensive.  I think it’s the student loan programs gone wild.

But “making your children pay for your lifestyle” hits the nail on the head on terms of my thoughts on why we plan to cover most, if not all, of our kids college education and don’t want to skimp on those savings.

[jeroly]

However, if you took that $6k in tax reductions [(28-22)x100k], saved it over your working lifetime, and saved it each year, and then took the proceeds and applied it to your kids' college costs, I'm pretty confident that they could 'pay their way' through the rest of the costs.  So declining to do at least that for your kids is on some level... making your children pay for your lifestyle.

Good analysis except for those who never made the equivalent of $100k per year, or anywhere near that.

Yes, and also these are marginal rates, so even if you earned $100k, the delta in taxes would not be anywhere close to $6k, it would be $200.  For 2023, the top marginal rate for income after deductions of $100k is 24% and it only applies to about $5k of the $100k. (95K is subject to rates of 10, 12, or 22%) Versus 28%, you are looking at a savings of $200.  $200 a year isn’t going to make a big impact.  Also, pre-1986, personal interest like credit cards and auto loans were tax deductible, the rates are just one part of the tax code.

Anyway, I don’t think it is reduced tax rates that making schools more expensive.  I think it’s the student loan programs gone wild.

But “making your children pay for your lifestyle” hits the nail on the head on terms of my thoughts on why we plan to cover most, if not all, of our kids college education and don’t want to skimp on those savings.

The median household income in 2021 was about $71k, so after adjusting for the last two years worth of inflation, and only looking at the subset of the two-income households (the vast majority of households with college-bound children)... it would seem that $100k is a reasonable basis for comparisons... however my screwup on marginal taxation is beyond facepunch-worthy. I blame jetlag after returning from an awesome holiday with my yet-to-FIRE sweetie.

Some points about student loans:

While student loans are more plentiful now than previously, and that easier access to student loans has fueled some individuals' bad spending decisions, (a) the new(er) loan programs address real needs, making college accessible to people who could not previously attend, and while it's fine to observe deficiencies in government programs' eligibility requirements, fraud prevention, etc., we should be very careful about bashing providing their demonstrable benefits to both underprivileged citizens as well as economic benefits to the society at large (in general terms, more education leads to higher productivity); (b)  it's also true that many families have taken on way too much student loan debt as a result of having been exploited by a variety of unscrupulous actors including for-profit colleges; (c) credit in general now is more available than 'back in my day' - remember that until the '80s even mortgages were hard to get, so part of this is just a manifestation of a bigger problem.

There are two other factors in play in my opinion I hadn't previously mentioned:

(a) The squeeze on the middle class over the past 40 years has enabled employers to become more selective in their hiring requirements and now a college degree is a requirement for employment in most blue-collar jobs, whereas that wasn't the case (and doesn't often need to be the case) for far more of them 'back in the day;'

(b) A certain amount of cachet has grown around bragging about sending your kid to private school, further driving demand.

It's going to be fascinating to watch the education industry adjust to the revolutionary technological changes happening as we speak - AI (and all the opportunities it provides for cheating via plagiarism, cheating on tests, faking online attendance, etc.), remote instruction, and more...as well as the political challenge of the new anti-intellectualism (e.g. Florida's school department).

[2sk22]

It's going to be fascinating to watch the education industry adjust to the revolutionary technological changes happening as we speak - AI (and all the opportunities it provides for cheating via plagiarism, cheating on tests, faking online attendance, etc.), remote instruction, and more...as well as the political challenge of the new anti-intellectualism (e.g. Florida's school department).

In addition, there is an "enrollment cliff" that will hit all of higher ed soon due to the dramatic decline in birth rate after the 2008 financial crisis : See https://www.synario.com/enrollment-cliff/

They are projecting a sharp drop in the number of applicants after 2026.

[EscapeVelocity2020]

Small rant time -
I'm just a casual observer, but one would think it would have been possible, especially during and after Covid, to reduce the price of college.  My kids just missed the year or two of Pandemic at-home learning, but this should have been a catalyst for colleges to find cost-cutting opportunities.  There is no doubt in my mind that colleges should be able to leverage technology to continue to provide a high quality education for a lower price.

Once again, America 'does it differently' than other countries and relies on the free market to set prices.  And once again, the consumer is faced with walking in to a 'supermarket' where we want the best product but have no idea what it will cost or how the prices are set, let alone what is the best value.  To complicate it further, things are dependent on which state you just happen to live in, so it's really hard to walk up and down all the aisles in the market and compare.  For the wealthy and well-connected, this supermarket works just fine, but for the casual Joe it's a nightmare.  Other countries have a more socialist approach to higher education, similar to health care.  And just like health care, the American system which worked at one point has now spiraled out of control.  I wonder if we'll ever get Federal action along the lines of an 'Affordable Education Act', given how massive student debt has become?

[pecunia]

Small rant time -
I'm just a casual observer, but one would think it would have been possible, especially during and after Covid, to reduce the price of college.  My kids just missed the year or two of Pandemic at-home learning, but this should have been a catalyst for colleges to find cost-cutting opportunities.  There is no doubt in my mind that colleges should be able to leverage technology to continue to provide a high quality education for a lower price.

Once again, America 'does it differently' than other countries and relies on the free market to set prices.  And once again, the consumer is faced with walking in to a 'supermarket' where we want the best product but have no idea what it will cost or how the prices are set, let alone what is the best value.  To complicate it further, things are dependent on which state you just happen to live in, so it's really hard to walk up and down all the aisles in the market and compare.  For the wealthy and well-connected, this supermarket works just fine, but for the casual Joe it's a nightmare.  Other countries have a more socialist approach to higher education, similar to health care.  And just like health care, the American system which worked at one point has now spiraled out of control.  I wonder if we'll ever get Federal action along the lines of an 'Affordable Education Act', given how massive student debt has become?

This comment may be indicative of the times.  I guess it was about 30 years ago that "market forces" were touted as the panacea for nearly all problems.  Politicians were seeking ways to privatize everything.  I think the pendulum is finally swinging the other way.

[farmecologist]

Small rant time -
I'm just a casual observer, but one would think it would have been possible, especially during and after Covid, to reduce the price of college.  My kids just missed the year or two of Pandemic at-home learning, but this should have been a catalyst for colleges to find cost-cutting opportunities.  There is no doubt in my mind that colleges should be able to leverage technology to continue to provide a high quality education for a lower price.

Once again, America 'does it differently' than other countries and relies on the free market to set prices.  And once again, the consumer is faced with walking in to a 'supermarket' where we want the best product but have no idea what it will cost or how the prices are set, let alone what is the best value.  To complicate it further, things are dependent on which state you just happen to live in, so it's really hard to walk up and down all the aisles in the market and compare.  For the wealthy and well-connected, this supermarket works just fine, but for the casual Joe it's a nightmare.  Other countries have a more socialist approach to higher education, similar to health care.  And just like health care, the American system which worked at one point has now spiraled out of control.  I wonder if we'll ever get Federal action along the lines of an 'Affordable Education Act', given how massive student debt has become?

I agree.  Due to the pandemic, my son did attend college at home the first year.  It actually turned out rather well.  Many of his peers skipped that year and are now a year behind, or never ended up going!

The only savings opportunities were the fact he was at home...and that saved us a ton in room/board costs.  However, NO tuition cuts whatsoever.

I do kind of get it though.  Many universities had to massively invest in remote tech, etc... They actually didn't have the technology to leverage.  That adds up.


BTW - we received an email about the new SAVE loan repayment plan.

https://studentaid.gov/announcements-events/save-plan

It actually seems like a decent plan...and takes aim square at the "interest problem" the current income based loan repayment plan has.   And it actually gives incentives to pay back the loan, etc... ( i.e. - interest over and above your determined payment is only forgiven if you make regular payments ).   This plan should eliminate many cases where the loan balance increases substantially even though the determined income based payments are made.