The article, Expecting the Expenses in the Washington Post highlights issues couples should consider when deciding to have children. This is an ongoing debate in our home and the author’s main points resonated with me because we have yet to decide how/if we will be paying for our children’s college education. Here are the some of the main points gleaned from the article:

o If you are planning on having children, save as much money as you can before baby gets here. Kids are expensive, but do I really need to tell you that?

o Look into a short-term-disability policies such as one from Aflac, a secondary insurance provider, to help cover the loss of salaries while the new mom is home taking care of baby

o Increase your withholdings (check with your financial/tax advisor) to help make up for the loss of one salary for a few months

o Create a will. I know its scary to think about this but it must be done. The fact is, should something happen to either parent or God forbid both, you want it very clear what’s to happen and who retains custody of the child.

o Set up a trust.

o Enroll in your employers dependent care savings account. Otherwise known as a health savings plan which allows you to set aside up to $5,000 of your earnings annually, tax-free.

o Decide how you will pay for college. Will you allow your little one to take out loans or do you want to start saving now to pay for college later?

The last point brings us to the issue Mr Latte and I differ on in our approach. Will you save for your child’s education? Or will you just allow them to take out loans? He contends that we should save from now for baby Latte so that they will not have to struggle with paying back student loans upon graduation. I think otherwise. I believe that if our child understands that they will be paying for their own education they will value the experience and education itself more than the child that was sent to college knowing that mom and dad paid for it. I go back and forth on the issue but I would be so hurt if we sacrificed for so many years by saving for their education only to have them blow it all by dropping out or getting ad grades warranting expulsion or something like that.

Furthermore, “you can get a loan for college but you can’t get a loan for retirement“, is pretty self explanatory. I want to be more than just comfortable in retirement because we don’t plan to rely on Social Security. That statement summarizes completely how I feel about the college v. retirement debate in our house. And, while we do pretty well financially I am not sure how we would go about saving for both without making some sacrifices in other areas. I still need to figure that out because I have strong feelings around saving for college and then our kid possibly blowing it all. I haven’t really researched 529 plans or anything of the sort, still trying to revamp the 2008 budget, especially since Mr Latte and I are on schedule for raises.

What’s your stance on the debate? Will you save for college or will you focus on other areas such as retirement? Will you do both?

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