This post was sponsored by Scholarshare.
I mentioned a couple of months ago that Mark and I had opened up Scholarshare 529 college-savings accounts for each of our four kids. With our oldest being nine years old, college really isn’t that far away. I know. We should have started saving for it earlier. Waaaaaaay earlier.
But now that we’ve done it, we’re finding that it has become a great way for us to teach our kids all kinds of civic lessons related to college, money, and the future. We’re all about finding good teachable moments with our kids. Just the fact that they know we’re doing this for them has led to some fun conversations. Here are a few of the things we’ve discussed:
The value of education.
Mark and I each have Master’s degrees. I teach college courses. Obviously we’re fans of higher education. When we told the kids we had opened up accounts to help them pay for college, it accomplished something pretty important: It suggested to them that college was in their future. Now, it won’t be the end of the world if one of our kids chooses a career path that doesn’t include college, but we want them to have every opportunity available to them. And there’s no denying that a college degree is valuable in the long term. To have them picturing themselves going to college now is a good thing.
The possibilities in their future.
Thinking about college makes my kids think about their future. I’ve caught them talking about how they might use the money in their accounts. They’re asking themselves questions: What do I want to be when I grow up? Where could I go to college? How could I help pay for college? I love anything that gets them imagining those kinds of things. Giving them ownership of that future is a huge milestone. (Especially if they end up getting a job to help cover some of those college costs.)
The limitations of debt.
When Mark and I were going to school, we ended up paying for most of our college costs ourselves. The result was a couple of advanced degrees…and a whole lot of student debt. Seriously. We just finished paying off our student loans in 2013. The truth is, paying off those student loans meant we entered our careers and marriage already saddled with debt, and that can be difficult for a lot of families. It certainly was for us. We saved, scrimped, relied on a lot of hand-me-downs, and somehow made it work. Telling our kids we don’t want them to have the same debt we had is a good way to teach them about debt itself—and how to stay out of it.
The importance of saving.
I love watching the way my kids’ personalities have developed. One might spend his allowance money immediately on whatever captures his attention. He could blow it all on gum. Another will save and plan and make the most out of her few dollars. They come by these financial personalities naturally. But we’re always teaching them about why it’s important to save money, and to live within their means. When they see us putting a few bucks into their accounts every month—for the distinct purpose of them someday going to college—it teaches them the value of saving.
The world of investing.
I’m no financial genius, so I’m enjoying learning about mutual funds, the stock market, compounded interest, and all of those things along with my kids. Each kid has varying levels of interest and math understanding, of course, but it’s been fun to show them how X amount of money per month plus X% interest could equal $XX,XXX when they’re ready for college. Their eyes light up at those numbers. If I’m not careful, I may find that one or more of them has opened a day-trading account somewhere. Is it wrong that I’m hoping one becomes a millionaire investment banker some day so they can take care of me in my old age?
I thought registering for ScholarShare would help alleviate my guilt at taking so long to start funding my kids’ educations. (It did.) I thought opening accounts with automatic withdrawals would be easy and efficient. (It was.) But I didn’t expect it to come with so many great opportunities to have conversations with my kids.
If you’re saving for your kids’ college, what do you tell them about it? Have you discovered similar teachable moments or conversation-starters resulting from it?