I am writing this after reading Sam Dogen’s post on Financial Samurai blog: Sadly Giving Up On Retirement And Going Back To Work. Sam Dogen being one for the well known person in FIRE community, his post got me thinking about the above question.
I understand the education costs in USA vs Europe/Switzerland may not be the same (depending on your target universities). But I guess some parents/kids might consider education outside Switzerland (UK/USA). Considering this, I wonder how parents in this community are planning their finances for future education of kids.
If my children won’t be able to qualify for a free education in Switzerland or another European country, maybe they don’t need it? And even if I have/decide to support them financially for them to obtain an education, we are talking about amounts an order or even more in magnitude less money than in US.
I am also saving nothing. I expect it to be almost free until they are at least 16. And even after that, it should not be too expensive, depending on what my son wants to do.
Disclaimer: I don’t have kids, so my thought is based on what my parents did.
Until I reached the University, my parents didn’t need to save anything for my education (neither for my brother education). Once in University, they had to pay for each semester CHF 500.- (so CHF 1’000.- for both of us). Then they also paid our books, so at the end they didn’t spend a lot of money in comparison to the education in the USA.
Of course, if you planned to put your child(ren) in a private education, the calculation is not the same and you should put some money aside in order to help them (if you want it).
If I had children, I’ll not put money for their education since the public education in Switzerland is really good and I don’t plan to put them in a private school. Of course, I’ll help them for paying books and other stuffs, and the University fees (if they want to go to the University). And if they want to study abroad, I’ll help them too, but of course, they will also work a bit outside their study to finance their education abroad (in order to teach them that mummy and dad are not just a bank). But this is hypothetical and based on my parents education
Talking about my own experience : if your kid chooses to go to university, there is a lot of very good ones in Switzerland, and the tuition fee are close to nothing (ex. Neuchâtel : 550 / semester). If you live close enough as I did, higher education won’t cost you anything more than what local school costed you.
Also, I thing that a kid over 18 going for higer education can chip in his money, and can be expected to get a side job, at least for his pocket money.
Besides what it is has been mention the are a lot of companies that offer students part time work. I’ve worked with few of them. So even they can pay by themselves, with no financial support from parents or minimal.
Also from experience, I’m in full agreement with Anne-Catherine about the negligible extra-cost for university IF you live close enough.
However, if commuting is long or cumbersome to the point that the additional fatigue could jeopardize the chance of success, an accommodation close to university will come in consideration. Then, additional costs are incurred.
In our case, we were happy to avoid more than 2 hours daily commuting by paying an accommodation close to university.
It wouldn’t be conceivable for us, with our level of revenues and wealth, to tell that we cannot afford providing that.
We also observed many side-benefits, in terms of independence and relationship with other students.
We did not specifically save in a separate pot to anticipate this situation, but the decision to spend came naturally when needed.
If our child has the chance and wants to go to a university like Harvard or to Paris, we don’t want money to be the deciding factor why it doesn’t work out.
The chance of that happening is rather small, of course. Therefore, we are not explicitly saving for this scenario, but would have no problem spending the necessary money for it.
Thanks everyone!
I agree (and aware) about the quality of public education in Switzerland/Europe. I was/am curious about how others are thinking/planning about this topic and hence above responses are very much appreciated. Thanks for sharing!
Another aspect came to mind earlier was that there might be some people that are not “permanently settled” in Switzerland yet (e.g. non-eu/non-swiss). Or, if kid would like to pursue a specialised education which is somewhere else. This means, there is always thought in background about how to handle the topic of education costs with the next career move. And hence wondered if there are people who are also doing additional planning.
No kids yet, but not planning on saving anything. If my kids go to a university/FH they can pay it on their own with a 20-40% job while studying. If the university/FH isn‘t close and they need to live in a WG, I‘ll just add the 500-800 CHF rent per month to my expenses.
0 savings directly. But I do put away 400/mo/child, starting once they reach age of 10. And increase by 5% yearly. Invested bi-annually into VT/VOO/VXUS. Don’t plan to handing it over once they hit 18-20, usage of it will be seen. Definitely don’t plan to just hand it over and go buy your first car for them to pose with and wrap around the first tree. Its not a an achievement bonus for hitting certain age.
Both of us came from nothing and started at bottom so I don’t believe in making the road in adulthood too easy. At same time, good to be prepared in case there are genuine plans which do require some invest like expensive years in tertiary education. And if it turns out to be something more expensive than ~60K needed, we will deal with it then.
For our child, we save CHF 100 per month that we put on selma finance (IMO the simplest way to invest without making any trade orders).
I hope the performance will be positive when our child is 18 so we will be able to explain the effect of compounding interest and how important it is to invest in a balanced portfolio.
Hopefully our child will see the importance to invest from a young age and decide himself to continue to do so!
Helpful to hear about someone else’s mistakes but I can’t believe the balls on this guy proclaiming
himself the “Financial Samurai” and “pioneer of the FIRE movement”
He hasn’t planned properly for education which is a fundamental expense for parents in the US. He seems not to have anticipated stock market downturns. And he realised he doesn’t really like the RE lifestyle anyway
I’m saving 200chf a month for one child plus gift by relatives but the purpose of this money has not yet been clearly defined. Could be for university or something else.
As other already pointed out, if you don’t live in a university city or maybe your child want to go to Geneva instead of Zurich, the main expense will be the second home economy ( Rent, food,…) You should account at least for 1000.- CHF/month given high rent prices.
Financial samurai is a pretty famous blogger and sometimes controversial, he famously said that 300k/year is mid class income. Lets remember that his blog was his primary source of income so he must capture readers, sometimes the blog quality is good sometimes not.
Sounds like a luxury problem to me I’ve been commuting to university 2 hours each way for 3 years. For me the time in the train was perfect to read and learn stuff. Also you can do a lot of thr lectures from home nowadays and physical presence is seldom required.
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