The Pros and Cons of Saving Money for Kids’ Future

05-01-2015 | Ramona |

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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Recent Comments

  • January 5, 2015 at 7:22 pm

    You’re right about no matter what happens there is some money saved for your daughter’s future. I’ve had conversations with parents who don’t want to give their kids financial freedom for fear of losing the experience of knowing the value of money.

    • January 6, 2015 at 8:21 pm

      I think it’s our job to teach her all the values of someone who can responsibly handle money. The fact we help her in the future shouldn’t come against these teachings, we’ve also been helped by our parents and it didn’t ‘break’ us 🙂

  • January 7, 2015 at 7:33 am

    I read somewhere an article that was titles something like “should you ruin your retirement to help your child through college?” and I was shocked to see this approach. We are raised differently here in Romania since income is generally low and I would not blink an eye if I had to cut back on some of my expenses to save money for my kid, be it “just” college or general money. Of course, the college taxes are still really low here, but they might skyrocket in the future, so it’s always better to be prepared.

    Also, I love your new blog, I just saw it today!

    • January 7, 2015 at 7:58 am

      Yeah, it’s not uncommon for older people with VERY small pensions to live very frugally in order to still be able to help their offspring with some money now and then. We do have another way we view family, it seems.

      Thanks for your kind words, will make sure to keep it updated with good content 🙂

  • http://Gary%20White

    September 23, 2015 at 3:03 pm

    I don’t personally see any downside to saving money for our children’s future. Sure, some may think about the responsibility factor, but if someone makes the effort to start saving money for a kid as soon as possible, they’ll most likely make an effort and teach the kid about financial education as well! These 2 go hand in hand, as I see it (you can’t save money for your child if you know nothing about financial responsibility!)

    • September 23, 2015 at 8:19 pm

      Well, haven’t thought it like this, but it does make sense. Ideally, someone who does save money for the kid should also be able to instill some good financial education to said offspring.
      Ramona recently posted…The 11 Top Benefits of Having a Company BlogMy Profile

    • http://JustAnotherSoccerMom

      September 28, 2015 at 8:06 am

      I agree! I’ve never thought about it, really, but what Gary said makes a lot of sense! I’ve been in a lot of trouble in the past, because of money (lack of, to be more specific) and managed to educate myself to be more responsible, and now I’m trying to pass this on to my kids, I really don’t want to see my own children grow up and making the same mistakes I did! But, it’s true, if I would have remained irresponsible, I probably wouldn’t even bother to teach financial responsibility to my kids!

    • http://rz3300

      September 11, 2016 at 1:21 am

      I think that the fact I know that my parents saved for me and helped me out, that is really the main reason why I will save for my children. I mean I know I will love them and everything, but I think that is something that hopefully just gets passed on, like a lot of other financial habits. The key is make them work for you and not against you. I get the whole responsibility argument, but have you seen the costs of colleges lately? They will probably need some help.

  • September 10, 2016 at 2:38 pm

    From where I come, it is expected for parents to save up for their children’s education. The burden always fall on the parents, but not all parents are able to do that. So a few of my fellow countrymen are unable to finish college. Some who did finish university without help from parents finished their schooling either through scholarship or taking on part-time jobs. In my family’s case, my parents could only afford to save for one child. There are 3 of us. Luckily, we didn’t have to use the education fund that my parents saved as all 3 of us got scholarships. So my parents were able to get back in full the amount they invested for education fund when our youngest sibling finished school as none of us used it when we were in college.
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