Thursday, April 17, 2008

Gifting an Education, Life-Lesson, and Financial Freedom

I just read something interesting on Washington Post Personal Finance Columnist Michelle Singletary's weekly e-letter from March 27. (When you click on the link, scroll down to the heading Asking for Money.)

Michelle asked her reads,"Is it rude for parents to ask that you give money for a college fund?"

I decided to email her a response. Here's what I said:

Dear Michelle,

If someone is asking what to give a child, I don't think it's rude to request money to go towards a college education. If the gift-giver would prefer to give a toy, book, etc., then they could just say that they would prefer something that will allow for instant gratification and ask for the child's favorite cartoon characters or current interests. But I like the second mother's idea of giving the child a small gift and then some cash for college savings.

I don't have children, but I can speak from being a person who received money for college when I was a child myself. Well, I never was 100% convinced that money I received as gifts was truly for college, but my parents always told me that was what the giver intended. (I usually got a small gift/toy from my aunts and uncles and grandparents and some cash too...and I would have loved to have spent that money at the toy store!) I had a Mickey Mouse bank, and all of that gift money went directly to Mickey. (Mom would clear out Mickey and take his savings to the bank every so often.) As a young child, college savings frustrated me. I didn't even really know what college was, except that it was sucking up a lot of my money! Even as a teenager when I knew I was definitely going to college, I didn't completely appreciate that money.

Once I was in college, Mom pulled the money out of my savings account and put it into my checking account for me to write the checks to the school. Wow - "thousand" was a really long word to write on a check!!!

My parents (with the help of all of those monetary gifts upon my birth, birthdays, Christmas, and other occasions) were able to pay for my undergraduate education. I left college with a bachelor's degree but no debt! Many of my friends weren't so fortunate. And many of them spent a lot of time working on things that I never had to know about out in the college's financial aid department. Many of them paid those loans for a long time after graduation. It was at that point I finally appreciated what my parents, my Mickey Mouse bank, and all of our kind friends and family did for me -- they gave me financial freedom! That meant I was able to start contributing a decent amount of money to my retirement fund when I got my first job after graduation...I think it also meant that I understood what it was going to take to save for a huge goal (i.e. retirement) that was many, many years away. A college education, a life lesson, and a jump start on retirement savings from a mere $10 or $20 gift. What a deal!

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Sandi said...

Betsy - You brought tears to my eyes. I always knew you appreciated this (in your adult years), but this is the icing on the cake. I hope someday you and Michael follow the same with your children.


Miss Mommy said...

What a great post!!! I can so relate.....My mom and dad always took all my birthday & holiday money and put it in the bank as well.(I too wished for toys back then)
Then when I got my 1st job at age 13 or so (babysitting) I always had to put 1/2 of the money I made into my savings account. I agree that I did not like to put half into savings....but later in life when I saw allI had saved I was happy my parents made me save the way they did.
If it was not for them making me save in those early years...I do not think I would be such a great saver today!!!

P.S. I now have 2 little ones of my own...and when someone asks what they need for their birthdays...I am just honest and say "Savings Bonds" or money for their college funds. No one has ever looked at me funny for being honest. lol lol