College Savings: How much is too much?
We started saving for Miss G's college education in 2005, before we moved to China. I signed up for a Upromise account, a 529 account, and a credit card* which allocated a percentage of spending back into the kitty.
So we have been regularly making deposits and that little 529 account has grown. But I wonder - how much is enough? How much is right? There is an easy way to start thinking about the answer - plenty of calculators exist to help people work through the time value of money problem.
But solving math equations is not my issue. I really am struck by the question of how much we as parents should be contributing to her education. Do we save enough to pay for all of a four year Ivy league degree in 2025? Or do we save enough for half of in-state tuition at a public school? What if she wants to do a gap year hiking in the mountains of Peru? How does that affect our estimated outlays?
Here is the thing: I opted for an in-state school over an expensive private school for undergrad. I chose free tuition and a monthly stipend over a fancy name. I also became an RA after my first year because it came with free housing. Am I worse off in life because I didn't go to Duke? Or am I better off because I chose the in-state school and paid my own way? Perhaps I am innately a practical person who works hard, someone who would have succeeded** regardless of the school?
Riddle me this - If I had had a bank account in my name ready for the spending, would that have impacted my school choice? If so, would I have been better or worse off by going a different route? Would it have impacted my character, my work ethic, my drive?
How much should we save? Not an easy thing to decide.
*Although spending to save is kind of stupid, but makes sense somehow. I guess.
**Have I even succeeded? Defining success is a whole other discussion.