The Pros and Cons of Saving Money for Kids’ Future

Posted on January 5, 2015 by in Save Money

Many of us, personal finance bloggers, are also parents, so the thought of saving money for kids’ future clearly passed our minds. Most of us had to pay for our college (or had parents help us with the costs) and, since tuition prices will only rise in the future (unless some sort of a miracle happens), it’s normal to think about our children’s future.

Back in 2000, when I was in college, my folks helped me pay for the first 2 years. The annual cost wasn’t this big (compared to the US college tuition prices for instance), but 500 euro, when my first salary was less than 100 euro/month, wasn’t too easy to cover. Even of my family was poor, they all made a huge effort to help with my tuition cost. They didn’t have the money saved upfront, so they had to cut back even more on our living expenses.

I was able to pay for the rest, as my salary slowly increased.

Knowing how difficult it was for us to pay for my college, both I and husband have started saving money for our kid’s future.

What makes saving money for kids’ future a good idea?

We are giving our daughter a start in life

It’s very clear to us that we’ll do our best to help her get a good education. My folks, as poor as they were, knew that this is my ticket to have a good life. It’s true I’m not actually using my college degree and learned web design on my own, but I was used to learning and had the tools needed for my future education.

My dream would be for her to get her own business up and running as soon as possible. This should help her avoid some of the frustrations she’d face as an employee. Of course, she can actually continue the family business, if she’d like, if not, we’re open to anything she’d love to do.

Even so, education is very important and we want her to also get a college degree. It might seem ‘useless’, but it’s something we’d want her to get.

Helping her pay for tuition would make it all easier: she can focus on learning, we can focus on what she needs.

We hope this way she won’t have debt

Student loans are a HUGE burden for many people nowadays. By being able to save money for her college, we hope that she’ll at least avoid this burden. Sure, she might get into car loans or credit card debt (which we hope won’t happen), but, if all goes well, we’ll be able to protect her at least partially from future debt.

She’ll learn a valuable lesson

Our daughter will be taught how to save money and encouraged to do so even from an young age. We don’t plan to keep it a secret to her that she’ll have some money stashed for her college education, we want to be very honest with her and never hide any money issues. This should teach her the value of saving money, even if we talk small monthly savings. You might not be able to save a lot at once, but even little money on a monthly basis can amount to something big in 10-15 years or more.

No matter what happens, there’s some money saved

We can never predict future and sometimes adversity hits our families hard. Maybe she won’t need to use the college funds herself, maybe she’ll be able to fund her own education, as I was able to (at least partially). Having some money saved though can help her when she needs it. Instead of having to get into debt, she can use up some of the money and get a better start. I wouldn’t have any issue if she used it for a down-payment for a home, for instance.

What makes saving money for kids’ future a bad idea?

I personally see no problem with this, maybe just the fact that we don’t let our daughter carry the entire financial burden of her future. Some might say this won’t teach our kid responsibility, if we’re doing it for her. I do hope the education she’ll get in our home will be enough for her to turn into a responsible adult (I turned our well, even if helped by my family) and our financial teachings and support should help her start a better life than other young people have now.

How do you feel about this?

Would you consider saving money for your kids’ future a good idea? Do you think it prevents the kid from becoming an independent adult?

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