Personal Finance (Not Investing) • spending my money now feels like getting 40% discount on future college fees, is that right ?

Hi,

It seems that colleges expect to pay 5% of assets as per year fees.

I have 2 kids. so 5% * 4(years) for 2 kids = (approximately) 40%

Say I have 1 million, should I just consider spending it now when kids are very young say for vacations instead of later.

It feels like if I save anything, college is going to take away 40% of it. That feels like additional tax and dis incentive's any savings.
FWIW, My kids are still young, less than 10 years old.

Parents with college going kids, did you feel sorry for sacrifices you made earlier only see half of that is taken away by colleges ?

For example: We haven't taken any vacation this summer, so that we can save some money for a winter day(some difficult period in future)
If half of the savings just goes to college just because I have it, it feels like I should just take those vacations and feel that I got this vacation for 40% off thus getting a good value out of it.

Yes, I like to spend on luxuries if and when they go on sale, now after knowing about college fees, it feels like every luxury is 40% off

Please help me understand it better if I am not thinking correctly.

Thank you.

Statistics: Posted by sharukh — Fri Jul 12, 2024 9:57 pm — Replies 6 — Views 526

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