When kids are young, their dreams are big and exciting. My six-year-old daughter, for instance, dreams of becoming a “pet doctor,” and my four-year-old simply wants to be a princess. It’s cute and innocent for now, but as they grow older, the reality of life sets in, and the time will come to have “the talk.” The talk where I explain that while following their dreams is important, they also need to think carefully about the practicalities of those dreams and how their career choices will shape their future. I want them to have a fulfilling life, but also one where they can thrive financially.
The Reality of Higher Education
Higher education has become a major topic in today’s financial world. As a personal finance writer, I often delve into the details of student debt, tuition costs, and how students can navigate the overwhelming financial pressures of college. The numbers are staggering:
- Graduates from the class of 2015 left school with an average student loan debt of over $35,000.
- Tuition at for-profit institutions can sometimes exceed the cost of Harvard, even for an Associate’s degree.
- National student loan debt has ballooned to a mind-blowing $1.3 trillion, growing by $2,726 every second.
These figures aren’t just numbers—they represent real people facing serious challenges because of student debt. Too often, we tell our children to follow their dreams without considering the long-term financial consequences of doing so.
The College Advice I’ll Give My Kids
Although my kids are still young, I’m already thinking about the kind of advice I want to give them when the time comes. The advice I’m planning to offer focuses on not just finding a career but designing a life that’s financially sustainable and fulfilling. Here’s what I plan to tell them:
1. Consider Community College for the First Two Years
A great way to save money while working toward a degree is by starting at a community college. Tuition at a local community college is often a fraction of the cost of a four-year school, and many credits transfer to larger institutions. For instance, at our local community college, tuition is about $4,000 per year, compared to $9,000 at nearby four-year schools. Starting with a community college can save thousands of dollars in tuition, and your degree will still come from a well-known university.
2. Choose a Degree That Leads to a Lucrative Career
While following your passion is important, it’s essential to choose a degree that will also lead to a stable, high-paying job. A college degree in a field with low job prospects, like my husband’s degree in theater arts, can leave you in a tough spot financially. Though his degree brought him joy, it didn’t open the door to a career in acting. In retrospect, he wishes he had chosen a degree with a clearer path to employment.
Many of the most talented people in the arts don’t need a degree to succeed. If you’re passionate about a specific field, consider pursuing it as a hobby while getting a degree that supports a more practical career.
3. Pursue Your Passion Outside of Work
This leads to an important point: you can still pursue your passion, even if your career isn’t directly related to it. In a perfect world, I’d have a degree in something like “Creative Relaxation” and spend my days lounging on the beach. However, reality is different, and I earn enough to enjoy vacations and hobbies without relying on my job to fund them. If you choose a degree that leads to a good-paying job, you’ll have the financial freedom to enjoy your true passion in your spare time.
4. Reevaluate the Need for a College Degree
While a college degree is essential for many, it’s not always necessary. If you have a solid business idea or are highly skilled in a trade, a degree may not be the best route. Vocational programs, two-year degrees, or certifications in specific fields can lead to well-paying jobs without the burden of student debt. There are many successful people who didn’t follow the traditional four-year college route and have done just fine financially.
5. Pay Off Your Student Loans Aggressively
When it comes to student loan debt, it’s crucial to stay committed to paying it off quickly. Avoid relying on loan forgiveness programs, which can stretch out your repayment period and add to the overall cost. The best strategy is to pay off your student loans as soon as possible—without letting them drag on for decades.
If you have a large amount of student debt, consider refinancing your loans to secure a lower interest rate. There are plenty of companies that offer refinancing options, and while you may lose some benefits, such as income-driven repayment plans, refinancing could save you a significant amount of money in the long run.
The Bottom Line
In an ideal world, we would all be able to follow our dreams, land our perfect jobs, and live a carefree life. But the reality is that we must make thoughtful decisions that balance passion with practicality. I want to help my kids navigate these choices by encouraging them to think about their future and avoid the common pitfalls of student debt. By making informed decisions, they can avoid financial struggles and create a life that aligns with their values and ambitions.
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