<p>People making $200k plus when their kid enters college were often not making that much when their kid was born. So their may be a hit for being at that income level without having the ability to save out if that income for many years. </p>
<p>Taxes can be a lot more than 38K, there are first state income taxes in many states, then Property Taxes, then Capital Gains Taxes. Bills add up, some places have MUCH higher costs of living than others. If I lived in the middle of Minnesota with 200K salary that would be a lot of money. If I live in New York, its not as much and all expenses increase. Parents also make contributions to retirement accounts etc. 200K doesnt mean college is affordable. After 300K in most places after regular expenses is enough to afford sticker prices.</p>
<p>PS - Is there an average number that we can add to the monthly budget for ECs (music lessons, sports, dance, etc)? It would have to be an average as each household’s children all do different things, but really, they all cost a bit of money. </p>
<p>Some people may say ECs are nice to haves. My kids were into music and ballet. I think we spent close to 10K for lessons.</p>
<p>@oldfort, I agree that many consider them a “lifestyle” choice (re: post #29), but in reality, many kids do ECs that cost money out of the budget. I know it is hard to come up with an average number that fits all. We seem to spend a fortune on several different ECs, including music.</p>
<p>I wonder how this will work for our kids generation? They are graduating with more debt and will have to save everything for retirement and pay higher taxes. How will they save for their kids school, buy a house, etc… No wonder they don’t want to have kids. </p>
<p>We spent a lot on music. Each kiddo took lessons on two instruments, played in precollege ensembles, went to summer music programs. Then there were the costs of music, and clothing for these things. I’m betting $8k-$10k…depend on the year and the kiddo.</p>
<p>The smart ones don’t want it. It’s everyone else you should be worried about.</p>
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This assertion is misleading. Capital gains taxes are not in addition to income taxes, they’re actually represent a lower tax rate applied to a tax special type of income. As such, they don’t increase taxes, they reduce taxes.</p>
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<p>Hope this wasn’t targeted towards me. I am a saver by nature - I am much more comfortable saving for a rainy day than I am spending money (I know, it’s practically un-American). I come from a crotchety, stubborn race of Southerners who don’t want to depend on others for help, if possible, and that includes financial aid. As a result, I probably over-save (if such a thing is possible) but that personality quirk did give me choices when it came time to choose colleges.</p>
<p>And I don’t live in a tent - it’s a small house, our starter home, but perfectly fine for my family. </p>
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<p>That is true. But I don’t think music is the most expensive EC. A lot of people spend a lot higher on instruction fees for ice skating, ice hockey, or summer academic programs (for example 2 CTY summer sessions cost more than $8K). However, they are still be able to afford college. People who spend money for private boarding schools can also afford college.</p>
<p>Coolweather…agreed. And remember…I said we paid out of pocket for college! I’m not complaining. That $10k was just diverted to college costs.</p>
<p>What a privilege to be able to afford one or more ECs for the kiddos, spend $6K/yr. on entertainment, go on vacations, etc.!!! Some of us with incomes way below six figures drive Honda Fits, had our last vacation of longer than 4-5 days (not including visiting & staying with in-laws) before kiddo was born, go to museums on the free day, watch movies on TV (no cable or Netflix), no smart phones, no fast food, and restaurants only for very, very special occasions. House is 2 br/1 ba. But yes, we qualify for financial aid and DD has two merit scholarships but she knew early on that we can’t afford to fly her home at Thanksgiving. DH retired earlier this year from his blue collar job because it was taking a heavy toll on his body so we will probably have to cash out some of our retirement savings to keep DD in school since there’s only so much we can cut back at this point.</p>
<p>We saved quite a bit for retirement before DD was born. My first couple of (low-paying) jobs had TIAA-CREF retirement, so the wonders of compounding grew that $4-6K to over $50K. </p>
<p>^^^Is anybody saying people with 200k incomes can’t afford college? I thought the argument was that people with 200k incomes can’t afford to pay a quarter of a million dollars per kid for college, which most can’t. Not without taking on lots of debt. There are lots of colleges we can afford to send our kids to. I just can’t afford to send my kid to Penn. Mind you, I’m not complaining. I’m just stating a fact. We plan on giving our kids the gift of a debt free, affordable to us education, which is something very few people can do anymore. It’s a good place to be in. If the Ivy League wanted my kid, they’d make it affordable. As it is, we’ll shake the dust off our feet and move on to merit granting schools, state schools, and maybe even commuter options. </p>
<p>I am saying people with 200k can’t afford full pay without a lot of saving and they are not eligible for FA.</p>
<p>Basically, those living according to what they can afford on their income, and not saving all along are going to have trouble. This all starts long before the income level hits $200K or any level, for that matter. It means things like when buying that house when one is making $60-80k, or whatever, one buys as if one is making less. If one parent is SAHM or working part time while the children are younger, still living conservatively and on one income and then the second parent going to work and putting that money towards new expenses sometimes works.</p>
<p>The problem is that most of us will buy a home, live the life that we can just afford at any income level. A close family member earns about this amount. And they live in the best neighborhood in the best home that they can afford with just a small margin for savings, retirement. Kids are in private schools and all kinds of activities. They are not flagrent spenders in terms of flashy things, but they are not living on, say, half of the earnings, and banking the rest. They have made their “set point” for standard of living right about at what they make. I did pretty much the same. I have a lot of kids, we wanted to live in a safe, convenient area in a nice big house and enjoy amentities for most of our life rather than live on half of our income, save it and then have the money for private college options for all of our kids. We had the choice many times during our lifetime and opted to go for more instead. So here we are today.</p>
<p>With $200k income, parents still need to spend $35k for public colleges like the University of California campuses. And people who have $140 income still need to spend $30-$35k for public or private colleges; their kids don’t go to college free. When talking about $60k for college, people with $200k income tend to get emotional. The discussion point is $25k more, not $60k more.</p>
<p>I never felt rich when I was in Bay Area with $300k+ income. When we both lost our job and had to survive in $25k income plus mortgage we were surviving but not poverty or hardship level either. The point is income/need definition is very stretchable.
BTW, music lessons are not that expensive, you just need to pick the right teacher. There are a whole variation of price and great teacher. Some charges a lot but can’t barely teach and some charges reasonable and are the best teachers.</p>
<p>Basically, you hopefully have saved some money for college for the kids. Not enough, but some. Hopefully, you tighten the belt on your everyday expenses and what you save having the kid out of the house (if that’s the case) and you take some of it out of current income. And then you borrow some as well. The student does the same. Hopefully kid has been saving some birthday, Christmas, prize, babysitting, dog walking, summer job money. Kid needs to work this summer and maybe find a job on campus and work all of the summers while in college. And kid takes out loan.</p>
<p>For us, to go away to a state school would be in the low $20s. For most states, it costs about $25K for the kid to go to an instate public. You split that amount past (savings), present (current intake) and future (loans) between parent and kids and make it work. If kid gets some scholarships, that’s great. If there is a nice nest egg that can be used, then the options open up so that private schools, OOS publics, some of the pricier state publics are also options If there isn’t the money to do State U, then look for local options. Kid can borrow $5500 first year and that can cover most community or local state schools and s/he goes on to college still living at home, just like high school being a commuter college student. Probably should get a job to meet expenses and have some spending money. That’s how most people do college, by the way. </p>
<p>The question we should all be asking ourselves is more along the lines of: 'is $40K-$60K per year a reasonable cost for college?</p>
<p>Not if you can’t afford it, but I do not know of any public schools that are $40,000 to $60,000 per year.
We dont buy cars that cost that much either.</p>