Thoughtful Thursday: Fund
August 16, 2012
Several commenters brought up the topic of college funds and other money that is given to children. Since I didn’t mention any of that in my post, I thought I’d discuss it more explicitly this week.
I believe in college funds. I believe that if a family has the means, they should pay for their children’s educations. I did not have a college fund by the time I got to college, even though there could have been an ample fund if my parents had made different decisions over the years. I was pretty pissed about that in college. Now, 15 years after graduating, I’m mildly annoyed that my loans aren’t yet paid off.
A friend of ours does not believe in college funds. He chooses not to have college funds for his children, thinking that they can go to state colleges. He chooses to bring in less income than he could and to spend the family’s disposable income on hobbies and vacations; he gets a lot of flack from his savings-minded friends for those choices.
Burrito and Tamale have college funds, but due to the way that tax benefits are structured, we put most of our savings into our own retirement accounts. We have every intention of paying for their educations, and moving the money around as needed, but thanks to Uncle Sam it looks on paper like we prioritize ourselves over them.
Even though we haven’t put that much money in yet, the balance of their college funds is still higher than the sum of the gifts they have received in their lives. As far as I am concerned, the money that people have given them has gone to them. In fact, we tend to do sort of a matching system, because in addition to putting money in the college funds we tell the gift-givers that their money is going to specific purchases like big-ticket toys. Relatives seem to get more enjoyment out of their gifts being enjoyed immediately by the children rather than paying for one college textbook 16 years from now.
However, at the time the gifts are given, we actually take the money. It’s pretty amusing to see DH take cash from a toddler’s birthday card and put it in his wallet — but it’s only amusing because I know that they will get their due at the end of the year. I’ve known parents like the one that strongblonde described in her comment last week who have taken money intended for their children, not out of need but out of selfishness. I certainly don’t believe in that.
What’s your stance on college funds?