I heard Christine Benz, Morningstar’s Director of Personal Finance, on CNBC this afternoon. Ms. Benz’s topic was balancing paying for one’s children’s educations with saving for retirement. One of Ms. Benz’s themes was that there are plenty of alternatives for financing one’s kids’ educations. As she put it (paraphrasing; I was driving while listening to Ms. Benz and do not possess a photographic memory), you can borrow to send your kids to college, they can do work study, go to a less expensive college, or go to community college for a few years. But there is no way to borrow for your retirement (much to the chagrin of my generation, for whom borrowing is as natural as breathing, but I digress) and thus there is no alternative to saving for your retirement other than foregoing, or postponing, retirement.
Despite my deep aversion to all things connected with Morningstar (This origin of this antipathy is another entertaining story, but I digress again.), Ms. Benz observations are probably correct as far as they go. And I especially congratulate her for pointing out the less expensive college and community college alternatives; it seems like, as our kids and their peers head off to college, “prestigious” institutions are replacing Lexi and McMansions as status symbols. And I have had it up to my keister, as Ronald Reagan would have put it, with people whining and complaining that their kids “had to” go to my alma mater, the University of Illinois, because they couldn’t get into a “better” (read more expensive) school. A lot of kids, and their parents, would give their right arms to go the U of I and, speaking of appendages, you can count on one, or maybe two, hands the number of schools, anywhere in the world, that are genuinely “better” than the University of Illinois at Champaign-Urbana…ask the engineers, the scientists, the mathematicians…and, perhaps especially, the hiring managers in just about any field. But I digress…again.
So Ms. Benz is probably onto something when she advises people to put their retirements ahead of, or at least on an equal footing with, paying for our kids’ college. But I have to disagree with Ms. Benz on at least two points.
First, as a parent, it is my first and most important job to provide my kids with the things that they need, one of the most salient of which is a college education if they choose to follow that path. It is my duty to send them through college without saddling them with debt. Sure, if they have some time, can work to help, and want to do so, that’s fine, but it’s not their job to sacrifice their studies so I can shirk my responsibilities as a parent. And note that I said that is my job to provide them with what they need, not what they want. So I am under no obligation to send them to some frou-frou, fancy pants private university for some silly reason, like a great program in Medieval Gender Expressionism, proximity to a nice beach, being situated in a warm weather part of the country, or some other such nonsense. But I do feel an obligation to pay for my kids’ educations, in full, at the school they choose…within reason.
That obligation, which would exist naturally, is reinforced by a deal of sorts I made with my dad. He paid for my college education at the U of I. Admittedly, it was really cheap back then…tuition was $350 per semester, less than my tuition at St. Ignatius, the high school from which I graduated and, even in inflation adjusted dollars, far less than I am paying for either of our daughters at the reasonably priced, especially after the academic scholarships the kids received, out of state Big 10 institutions they attend. Nevertheless, my dad, who didn’t go to college himself, did pay for a college education at one of the finest universities in the world. (Well, maybe the U of I had not yet achieved the status it has of late, and certainly the admission standards back then were far lower, as should be self-evident. but it was, even then, a great institution of higher learning...and partying…another digression.) And, had I been able, or wanted, to make the case for a more expensive school, he would have paid for that, but I neither could not wanted to make such a case; I was honored and delighted to go to Illinois. The deal was that I would pay him back by paying for my own kids’ education. By the grace of God, I have been able to fulfill, so far, my end of that deal. But I would feel the same obligation even without making that deal with my dad.
Second, I know my generation well enough to be alarmed at Ms. Benz’s advice. When she says that there are other ways to pay for your kids’ education but that it is imperative to save for retirement, most of my generation will NOT say something like
“Oh, good. My kid can go to community college for a couple of years, get a part time job, or go to Illinois, Illinois State (or a SUNY school, Rutgers, another state school etc.) so that I can put away more money for my retirement, as I should.”
No. What most of my generation will say is something like
“Oh, good. My kid can go to community college for a couple of years or go to Illinois, Illinois State (or a SUNY school, Rutgers, another state school, etc.) so that I can buy another Audi or build onto the McMansion or buy the latest generation of television (which I simply cannot live without) or get season tickets to the local sports team or eat out more frequently and at better restaurants.”
Mine is not a generation, as a whole, that suffers from a surfeit of concern for the next or the prior generation. Mine is a generation that thinks it is looking out for itself when it spends money, even ostensibly on others, in a crazy, misguided attempt to fill inexplicable voids by spending on geegaws and gimcracks for people to see.
So while Ms. Benz means well in pointing out that there are ways to save on education so that one can retire more comfortably, most of my generation, which knows nothing of saving, sacrifice, or otherwise acting responsibly, will hear something else, to wit
I can scrimp on my kids’ educations so I can buy more crap for myself so that the neighbors will be impressed and I can enhance my self-esteem
or some other such self-serving nonsense.
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