Tuesday, March 31, 2009

Why my kids don't have a college fund

Ugh, this is a sort of a big confession for me to put out there for anyone to read. I'm kind of embarrassed, but not at all sorry to admit that I have nearly zero dollars set aside for my kids' college funds. But after reading Will your parents’ financial decisions leave you holding the bag? by Millionaire Mommy Next Door I've decided to expose my secret.

It's not that big of a secret. My kids are quite aware. They are quickly nearing college and don't have any delusions of going to big money schools. But I wanted to tell you why we don't have college funds and it's all about my parents--especially my mother.

Here's the story: My mother was completely unaware of finances her entire life. Her parents were well off and so she never gave money any thought. Then she married my blue collar dad. He was practical, even frugal. He made a decent salary, but still couldn't save very much. When I was about to graduate from high school he told me there was no money for college and suggested that I just get a job. "Thanks, Dad!" I mean it. I was able to go to college through grants, scholarships, financial aid and working. It made me appreciate my education more. But that's not the real story....so back to my mother.

My parent's divorced eventually, but my mother still had no money skills. To make a long story short she purchased a condo in her late 50s, then became seriously ill. She did not have any health insurance, emergency fund, no savings, no investments, not even a job. She lost her home to a sheriff's sale because she skipped paying property taxes. Her biggest mistake was not admitting to anyone that she needed help.

This all blew up around 6 years ago. My husband and I felt obligated to step in to help her. We dipped into our own savings for a significant hit. We couldn't save her home, but we bailed out her bills. She now lives in subsidized housing, but is able to make ends meet with her meager social security check. It's not a bad ending, but I wouldn't want to be in her place. This week she will be 70 years old. She's struggled most of adult life because of money problems--mostly because she tried to ignore the reality and necessity of money.

What does this have to do with my kids' college fund? Plenty. Rather than putting money into their college education, my husband and I are saving for our future. The kids are practical. They're looking at taking core classes at the community college and later transferring. I know that we'll help them when they need it. There are also a variety of ways to fund their education. Plus, I know my kids and I firmly believe they'll put more value into making their own way.

However, my main point is that I don't want them to worry about supporting their parents. Of course, I can't predict what might happen, but that's my goal. I think it's the best gift I can give them. And if I have anything to thank my mom for it's that she taught me not to ignore money.

photo by AyelVee

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