With all the press about people not saving enough for retirement, or much else for that matter (the median household net worth is $91,304, including home equity) I’ve been thinking more about how people prioritize their spending. Debt taken on for college tuition has always been thought of as “good” debt. I’ll pass on that judgment and just call it a sometimes necessary evil. But for whom, the student or the parent? Should parents pick up the tab? There are studies out there for nearly everything, I wonder if any study has been done on whether students do better for the fact that they had their schooling paid for, therefore not needing to work while going to school, or if they did better having their own money at stake.
We have been fortunate, by having a child later in life, we were able to start saving from the day she was born and will be able to handle those bills by the time she’s in college. Others might be tempted to tap their equity lines or take early retirement account withdrawals to put their kids through college. I’d suggest not doing this if it puts your own retirement at risk, you don’t get a second chance to save. Fellow Money Maven Len Penzo offers 22 Signs Your College Degree Might Not Be Worth the Money, Craig Ford offers a different spin with Roth IRA college savings, Monevator gives us 10 reasons to retire early, Neal Frankle asks Can You Retire Now? Makes you wonder.