Saturday, January 29, 2011

Saving, in more ways than one.

Do not leave yourself or your family unprotected against financial storms. Forgo luxuries, for the time being at least, to build up savings. How wise it is to provide for the future education of your children and for your old age.
The smaller the family income, the more important it is that every dollar be used wisely. Efficient spending and saving will give the family more security, more opportunities, more education, and a higher standard of living.
Ezra Taft Benson, "Pay Thy Debt, and Live", Ensign, June 1987, 3

L’s parents lived on his father’s modest income.  His mother was a master at budgeting and making do and she and her husband were united on their financial priorities and they believed in putting aside savings for the things that were most important.  L’s father died suddenly and unexpectedly when L was 16 years old.  Two years later L started college.  A combination of scholarships, work study, attendance at a subsidized university and money his father had carefully saved for his education allowed him to graduate with his bachelor’s degree debt free.  Scholarships and work study were not available for his graduate education but the money his father had set aside was enough to cover his tuition at a state school where he was fortunate enough to be admitted.  He lived at his mother’s home for those first two years in order to cover his living expenses and then, after we were married, I worked to pay for them.  He graduated from with his doctoral degree without any education debt, something for which we are profoundly grateful. 

My parents had a larger income, though they also had seven children which made budgeting also important.  My father had paid for his undergraduate education with a combination of work and financial assistance from his father, who had saved money for that purpose.  My mother was an undergraduate with another two years of school ahead of her when she married my dad in his second year of post graduate education.  She worked part-time and finished her education two months before I was born.  Financial assistance from both of my grandfathers was essential for my parents’ family as my father did his six years of residency at a time when residents were not paid anything at all.  My parents were profoundly grateful and determined that they would try to bless their children similarly.

When I turned 18 and started college I also worked and studied and it was savings set aside by my paternal grandparents for their grandchildren that made up the difference in my tuition.  I finished without any debt as well.  Their assistance enabled my father to shift his education savings towards the education of my younger siblings.

What L and I found was that this tradition of older generations saving for the education of the younger leaves a profound gift of freedom for both generations and the extended family, not just the younger ones who are in school.  Finishing school without debt saved L and me not only from huge amounts of stress and anxiety about the future, but also enabled us to be available for more opportunities for service.  If we had been paying off education debts when L’s brother was called to serve as a mission president at the end of L’s training, we would not have been able to provide the financial assistance he needed in order to be able to respond to that call.  But, because we had no debt obligations, we could.  And L’s brother was able to serve.

We started saving for our children’s education when they were born.  At first it was only a little bit while we were living on L’s early small salary, but we knew we needed to start that habit in order for it to last for the ensuing decades.  We knew that if we waited we would wait too long.

 Sometimes we forget, as parents thinking about the future educational needs of our children, that financial aid packages not only require work study, grants, and student loans, but also parental contributions as well. I have sweet friends who were unable to save for their children’s education and thought that if they sent their children to community colleges and state schools they would be able to manage that.  Little did any of us anticipate how those tuitions would increase over what they were when we were students.  They are now are paying off parental obligation debts they incurred for their children’s education at state schools while their children struggle to pay off their own portion of those education loans.  My friends had planned to be serving as senior missionary couples by now, but those debts make that not possible.

Yes, if your children are blessed with particular athletic or academic gifts, or admission to a particularly inexpensive school they may be able to get themselves through their undergraduate education with a lot of work and no debt.  And I am very much in favor of students working to help pay for their tuition. But it is much, much harder for a student to graduate debt-free than it was when I was a student as tuition costs have far outstripped inflation. And the financial outlook is even grimmer for the children being born today.  It behooves us to make sacrifices that enable both them and us to enjoy freedom from enslaving debt as much as possible.

Finally, many parents are poor enough that saving is impossible.  Financial aid, scholarships and work study will likely decrease in the future as educational institutions struggle with budget decreases and rising costs.  The competition for those resources will increase as student population increases.  It behooves those of us who can set at least some money aside for education to do so in order that those resources may be spread more widely among all who need it.  Thus, saving for education not only blesses you and your children and your extended family, but also gives you opportunity  to fulfill the commandment that we assist those in need.

Ezra Taft Benson’s counsel has proved wise for us.

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