Do you believe parents should pay for their kid’s college? A lot of parents believe that they should. There are also a lot of parents that believe if their kid goes to college they are on their own to pay for it. Let’s first look at who I think shouldn’t.
If you are in Financial Stage 1 or 2, you should not be paying for your kid’s college. This is when you are not to a point financially where you are investing for your own future and therefor you should not be investing in your kid’s future either. You need to be investing for your own future before you contribute anything towards your kid’s college. Who knows, your kid may not even choose to go to college. They could even get scholarships that pay for college. Or, gasp, they could even choose to work and pay for it themselves!
So, when should you consider possibly investing in your kid’s higher education expenses? Once you are in Financial Stage 3 and you are investing for your own future, plus you have paid off all consumer debt, you may want to consider paying for your kid’s college (or setting aside investments to pay for it later). Even then, I would encourage you to be realistic about where you are financially before doing so. You should feel very confident about your financial situation and your net worth should be not just positive but also increasing regularly.
Another point to not take lightly is that you should never go into debt to pay for your kid’s college. Your investment in your kid’s college education should be just that, an investment. Investments grow your balance sheet, they do not serve as liabilities that deplete your net worth. So be sure to only contribute money that you on hand today for your kid’s education.
On one final note, you should also be sure to meet your generosity goals while paying for your kid’s college. Paying for your kid’s college should not be a burden on your finances nor on the causes that you choose to support financially.