44 comments

The Coffee Machine that can Pay for a University Education

Now that readers are starting to fantasize about getting a little bit of this early retirement action for themselves, Mr. Money Mustache is getting many questions about the typical expenses people imagine in their future. One of these is “How will I pay for the University* education of my children”?

I must admit, even as the Dad of a 5-year-old, I don’t do much thinking about how I’ll pay for his education. And I don’t think you need to worry too much either. Why? Because once you grow your Money Mustache a bit, this will seem like a tiny amount of money to you. And as with every other expense in your life, it is in YOUR CONTROL.

How much does a College education cost? Some people get big spirals of fear in their eyes and cry out “Two hundred thousand dollars!!!” Yeah, in the worst case if you pack your kid off to the most prestigious and expensive private university in the country, he never gets a job or scholarship and no financial aid, and you pay for all his rent, clothes, beer, tuition, and books, it is possible to spend this much or more on an education.

But I just looked up some real numbers for my local University of Colorado at Boulder, apparently a pretty fine institution.

University of Colorado at Boulder – ANNUAL COSTS
City: Boulder
State: CO
In-district tuition: N/A
In-state (out-of-district) tuition: $6,446
Out-of-state tuition: $26,700
Fees: $1,486
Room and board: $10,378

Hmm.. What I see is $7932 per year for tuition and fees. If your kid is like I was, and is willing to pay for his own education with no loans, and live at home with the parents for free rent and food to achieve this, he can accomplish this with only 528 hours of paid work (3 months at 15 bucks an hour) per year. In other words, working during the summer as a landscaper or painter already pays for your whole education, debt-free.

That’s the minimum-cost scenario. Now let’s take the maximum cost: out-of-state tuition PLUS room and board. $148,000 for four years.

Let’s say you have a baby right now. You’d like to pay her way in full to Colorado University even though you live in another state. And you don’t want her to ever have to work, or get any scholarships between now and graduation at her 21st birthday.  No, you don’t think this will make her grow up to be a spoiled brat with no work ethic, because look, she’s just a cute little baby right now!

You currently work and you and your spouse both like the local Starbucks a bit too much. In fact, you each stop in at the drive-through every day for a coffee and small treat on the way to work. You also stop in on the weekends too. In total, you average $7 each per day** for fancy coffees and the occasional lunch here and there.

You can probably guess how this adds up. This habit, compounded at 7%, adds up to about $148,000 over the 17.5 years from your baby’s birth until she starts university***.

So, just switching to brewing good coffee at home, which I just calculated costs about 10-15 cents per cup if you buy your Organic Fair Trade Espresso roast in 2.5lb bags from your local Costco, will pay for pretty much the whole worst-case education.

And as an MMM reader, you will NOT be incurring a worst-case education cost. Your kid will be a school whiz because you will have time to be home and read with her. She’ll earn money throughout high school, perhaps even doing some advanced assistant work for your own part-time consulting career. And she’ll probably have a Money Mustache of her own going on by age 17, so she will find ways to spend less than the maximum possible amount on her own education. She’ll graduate debt-free and be financially independent before she even has kids of her own at age 30. A permanent repeating family dynasty of happiness and wealth will be born.

At this point, you’ll invite Mr. Money Mustache out for a decadent sushi meal to thank him for changing your lives.

 

* I’m always torn as to whether to call it “University” as we did in Canada and the rest of the world, or “College” as it tends to be called in the US.  I’ll say “College” in this article just since most of the readers are in the US right now and thus it will show up in the search engines more readily.

** I admit that having two people each wasting 7 bucks a day is a bit extreme for me to imagine. But to pay for the in-state tuition equivalent, and still the full ridiculous room-and-board, it’s less than $3.50 a day.

*** Let’s assume that the 7% return is the after-inflation number, as described in “Dude, where’s my 7% investment return“. This accounts for the fact that university tuition will rise with inflation as well… unless we eventually start taking education seriously as a country and bring the cost back down as other advanced countries do.

  • Peach Fuzz May 12, 2011, 10:22 am

    Nice post Mr. Money Mustache! What I have done, here in Canada, is take the cheques that the Canadian Government sends me each month, presumably as a reward for procreating. They send a cheque and I view it as “found money” and put it into an RESP. It works out to about $150 a month, but can be more or less depending on what you make. The government then gives me another 20% of each amount I put in! Plus I earn my return, compounded annually and all that. I figure this way, the Government pays for his whole University Education. If it isn’t enough, he may have to get a job. So there.

    Reply
    • MMM May 12, 2011, 11:21 am

      Very nice plan! In fact, it might even be TOO generous if you do the math: if it compounds at 7% after inflation, you put in $150/month and the government boosts by 20%, you’ll end up with about $70,000 by the time your youngster is 17. That is a hell of an educational gift!

      It is always nice to have a surplus, but if you ever feel strapped for investable money in your own life, you do even have the option of using $50-$100 of those monthly dollars for something else – paying down other debts or investing more for earlier retirement or a more relaxed work schedule during the early childhood years. After all, would your kid rather have way too much money during University, or a bit more time with his parents when learning to read? It is an interesting tradeoff.

      Reply
  • Peach Fuzz May 12, 2011, 11:28 am

    Hmm… I don’t have your Ninja math skills, but I didn’t realize it would be that much! Hooray! We don’t really have any other debts (except for our Mortgage) and an undergraduate degree ain’t what it once was. youngster may need to do post-graduate work. So, for now, I’ll stick with it. PS. How did you know how long until my youngster is 17? ; )

    Reply
  • MMM May 12, 2011, 12:51 pm

    Sounds great! You can never go wrong with too much saving, as long as you aren’t compromising your parenting to achieve it.

    I think an undergraduate degree is MORE than it used to be. In many fields like my own Engineering one, the meritocratic nature of the Internet and the breaking down of old Suit-and-Tie-and-Pedigree culture is making the degree more of an optional thing. Partly because society and the work world is now changing faster than the educational institutions can keep up.

    In Engineering for certain, as well as business, art, music, writing, and who knows what else you can make it to the top without a degree, and having a postgraduate degree is in some case even looked upon as dorky and impractical – even a negative when deciding if a candidate will be an actual achiever in the real world!

    I still recommend university educations for everyone who can afford them, but I do like to speak out against the overly expensive assumptions that some people are making. University gets you nice background education, but it is people skills that get you jobs!

    Reply
  • Kevin M May 27, 2011, 9:56 pm

    My strategy for college savings has been to use the $1,000 child tax credit provided by Uncle Sam. We have 2 kids, and thus get $2,000 each year. After we get our refund, I simply take each kid’s $1k and put it into an UTMA account. I figure by the time they get to college we’ll have roughly $18k for them to use.

    From there, I plan on using the strategy my parents did. My sophomore year of high school they told me they had money saved for college, but if I was able to get scholarships to offset my tuition, any leftover money would be mine to keep. It worked well, I made sure to keep my grades up in high school and got a high ACT score that netted me $2,000 scholarship per year.

    Reply
  • Paul T June 15, 2011, 7:46 am

    I must cry foul, you consistently oversimplify in your posts, often by a great margin. This is one of the worst…

    Lets say a University education CURRENTLY costs $148k.
    You start saving for it now by cutting down on coffee and with a compound interest rate of 7% over 14i’sh years you end up at $148k
    Does the University education still cost $148k or is it not subject to the same inflationary factors that gave you your 7% return?
    At the same rate it would have risen to $380k (rough calculation), even at half the rate, ie you are achieving double inflation on your savings it is $240k (rough calculation), you are still $90k short.

    I am interested in your answer…

    Reply
    • MMM June 15, 2011, 8:51 am

      Hi Mr. T,

      Thanks for the fact-checking. I always enjoy a little constructive criticism. And you don’t have to cry – the investment gains listed in that article, as with all other articles, were already adjusted for inflation. I added a footnote to that effect, just for you.

      If you think Mr. Money Mustache’s articles are consistently too simple, you might have to write some more complicated ones on your own blog. I’m writing these things for two reasons: because it’s fun to write them, and because this shit works. The point is teaching you to waste less money, and to illustrate the benefits you get from that in the surprisingly near future. It really is very simple for a moderate-to-upper income person to become rich enough to retire very young, so this blog about it has to be simple too!

      Reply
  • Oskar August 2, 2011, 8:48 am

    Here in Sweden we also get some money from the government to have kids right now it is about 150$ per kid wih a little (about 10%) added if you have more kids. This is the same for all and is not income adjusted as it (in theory) is money for the kid which does not have any income. We put this money into a fund for our kids (now 1 and 3 years old).

    This will add up to a fair amount when they turn 18…but I am already thinking about how we can best ‘give’ this money to the kids helping them to get a good start in life but at the same time helping them grow their money mustaches. Any ideas??

    Reply
    • MMM August 3, 2011, 9:39 pm

      I’m sure you will come up with great ideas yourself. My own strategy for my little son is to teach him that money is not an infinite resource, and neither is the Earth.. so each time he wants to buy something (or have something bought for him), he must weigh it against all other possible uses for that money. Having kids feel like they are choosing and purchasing their own toys, rather than just getting them free all the time, helps them appreciate how long it takes to earn something, meaning decisions are made more carefully. If you carry that mentality up through adulthood, you end up free from financial troubles for life.

      Reply
  • Oskar August 2, 2011, 9:02 am

    I should say it is 150$ per kid/per month for 18 years.

    Reply
  • Dancedancekj September 10, 2011, 8:10 pm

    I like this a lot. I just hope that universities don’t keep having the exponential increases in tuition that they have the past 10 years or so. A recent graduate from my program (2004) informed me that he was paid only 25% of my current tuition (as of 2011) for the same program.
    Also, I’m of the belief not everyone needs (or even wants) a college education. But that’s a whole other topic I believe.

    Reply
  • Katie October 16, 2011, 8:22 pm

    I just calculated the cost of my coffee habit since buying a Nespresso espresso maker and milk heating/frothing device a year and a half ago. At this point in time my coffee costs about $2 per cup (compared to my $5.50 grande soy latte from Starbucks, which I still occasionally indulge in). The coffee pods cost about 0.68 cents each, and they’re aluminum so I can recycle them and compost the used grounds (this requires a bit of work but is worth it – anyone who puts aluminum in the garbage needs a kick in the teeth). The machines were nearly $400 combined. Using a conservative estimate, I have already saved about a thousand bucks by making my own lattes at home, so they have more than paid for themselves. (I tried to factor in that I am most certainly drinking more coffee now than when I had to go to Starbucks for it). It is more than worth it to have a machine that pulls a perfect shot of espresso with little time or effort. Also, it’s healthier – no sugary latte syrups. Vanilla soy milk + a good sprinkle of pumpkin pie spices from the bulk food store = yum!

    Reply
    • Jennell June 25, 2012, 11:34 am

      I realize that I am lagging about 8 months behind here but I had to make sure that others who come across Katies comment are told that Nespresso pods (any coffee pods) are NOT recyclable. Rather than typing out all of the greenwashing of Nespresso I’ll just leave this link.

      http://www.coffeehabitat.com/2011/09/nespresso-capsule-recycling/

      Making coffee at home is the most efficient way to increase your ‘stash but pod machines are very expensive and require massive amounts of mining to produce the minerals required for the machines and pods. A simple 1 cup pourover can be purchased for $5.

      http://www.drugstore.com/products/prod.asp?pid=334612&catid=186078&aid=338666&aparam=334612

      The grounds and the nonbleached paper filter can be composted. Earthcrisis averted.

      Reply
      • Katie July 7, 2012, 7:53 pm

        Nespresso pods ARE indeed recyclable.

        In the comments in the article you linked to, someone said they had called the big waste management company in North America and confirmed that they do recycle the pods. That company does waste management where I live so I know my pods are being recycled.

        I’m so glad you posted the link though; I bought one of those “outpresso” devices that makes the recycling so much easier. Until now I had been opening each capsule with a paring knife, talk about tedious.

        Anyway…I’m not going to perish in eco-guilt for using my Nespresso. In addition to the ability to quickly and easily make a perfect shot of espresso, I chose that machine because I can recycle the pods and compost the grounds, and because the machine has energy saving features. I don’t drink drip-coffee, so that single-cup brewing thing you linked to is not gonna do the job. I would bet that my machine uses less energy than brewing espresso traditionally would, because I would have to turn on my stove for that. Just like an electric kettle is more efficient than a stovetop kettle.

        Either way, “earthcrisis” has not been averted because coffee is not an eco-friendly thing to consume, period. But if we wanted to have zero impact on the earth, we would have to hang ourselves with fair trade hemp rope and have our bodies eaten by endangered wolves.

        I figure I’m balancing out my coffee habit by buying green electricity from my hydro provider, and by never having owned a microwave, TV, or car. I’m not going to feel bad for not being perfect.

        Reply
  • CG January 24, 2012, 12:41 pm

    Last year I got our coffee at home price down to $.17 per 6 ounce cup. That’s with cream and sugar. Hubby uses a boatload of sugar. We buy Archer Farms decaf at Target for about $8.50lb and the donut shop blend from Aldi at $6lb. These are the cheapest options that we’ve found that taste great. We use a french press. When the coffee is gone, I pour another 1/3 pot of hot water onto the grounds and get some “free” decaf.
    I think I’ve had a fancy coffee out 3X in my entire life and that was for roadtrip caffeine purposes. I just can’t see what’s so special about overly sweetened hot bean water that makes it worth $5.

    Reply
  • jlcollinsnh February 8, 2012, 10:14 am

    sound analysis here, Mr. MM and let me back it up with our actual numbers as we are in the middle of the process.

    Of all the schools that accepted her, our daughter’s choice came down to New York University (55k per year, 220k total) and The University of Rhode Island (37k per year, 148 total).

    Said daughter is a school whiz, as you put it, and URI offered her 12k per year.
    NYU, being NYU, offered zip.

    She is in her second year at URI and loves it. She is a double major in Poly Sci & French. Great opportunities abound. She’ll be spending her junior year studying in France. She’ll come back having most of her Poly Sci credits done and having done them in French.

    She has had to turn down an offer from The American University in DC for lack of time and is already in discussion with the US State Department, The UN and The EU regarding internships post France.

    So clearly choosing the state school hasn’t limited her options. Meanwhile we are saving 35k per year.

    After her scholarships, 25k is the annual out of pocket. 100k total, half what I had planned on.

    Reply
    • Kenoryn November 18, 2012, 12:07 pm

      Wow, cost of living may be high in Ontario but here we clearly have you beat! I paid $5500 per year for my tuition and fees at Trent University. Except I didn’t actually pay that much because I got a scholarship for almost the full amount, which at the time was offered to 2 new students per year and I had to write essays and do interviews to get, but now Trent offers free tuition to any student with a 90% average graduating high school. Of course, people still complain about the cost of tuition around here, and in Quebec, they recently had major student protests about it, even though their tuition is even lower than ours in Ontario.

      Reply
  • Janet February 8, 2012, 2:22 pm

    I used bankrate.com to calculate that saving $50/week for 18 years, at 7%, compounding daily only came to $92,000. So can you explain a little more how you got all the way up to $148,000?

    Reply
    • Mr. Money Mustache February 8, 2012, 10:45 pm

      I think the article describes TWO people each spending $7/day or $49/week. So you’d have to plug in $98/week for 18 years to calculate the Starbucks Dividend.

      Reply
  • Christine Wilson February 8, 2012, 2:54 pm

    What do you think of parents purchasing a house with a basement apartment for the child to use when they go to University? I was thinking this gives them a certain independence while still saving by living at home.

    Reply
  • Oelsen February 9, 2012, 5:44 pm

    And then there is still the possibility that in 20 years, everything changed like it did e.g. in Russia from 1985 to 2005. Think about it.

    Reply
    • Uncephalized June 8, 2012, 8:23 am

      Given that this kind of thing is impossible to plan for, not much point planning for it, is there?

      And in that kind of situation, flexibility and skills are probably the most important things to have–attributes which a 30-year cubicle worker probably won’t have as much of as a Mustachian “retiree”.

      Reply
  • Sarah March 2, 2012, 8:13 pm

    I am not going to invite you over for sushi because …. I’m vegetarian!

    Reply
    • Mr. Money Mustache March 2, 2012, 8:52 pm

      Wait.. Are you telling me that sushi does not count as a vegetable?

      Reply
  • sheep August 5, 2012, 9:46 am

    I believe colleges only do undergraduate while universities offer undergraduate and graduate degrees. I think you just meant that Americans and Canadians use different terms when they want to refer generically to any institution of higher learning, but I still thought I would mention the difference between the words because having a good vocabulary is both frugal and fun!

    Reply
    • Kenoryn November 18, 2012, 2:42 pm

      In Canada a college refers to a diploma- or certificate-granting institution, where you could get, for example, a Ceramics or Educational Assistant diploma, but not a Bachelor of Education, and university refers to a degree-granting institution, undergraduate or otherwise, where you get B.somethings, M.somethings, and Ph.Ds.

      Reply
  • Pat February 24, 2013, 6:49 pm

    Least expensive way to fund your child’s education? Work for the insitution. I changed jobs, and a side benefit is that my daughter has her basic tuition fully covered. An added benefit is that it is taxable in her hands, not mine. This applies to everyone employed by the University, you don’t have to be faculty. We had already put all the baby bonus money in a mutual fund, so there will now be money left over when she graduates.

    Reply
  • Josh March 6, 2013, 12:48 am

    I just found your website today and have been reading from the beginning (I realize this is a VERY old post but I assume you’ll still see the response)

    It is NOT unreasonable to see couples spending $7 a day at Starbucks, in fact it’s expected that many single people will spend that or more DAILY! It’s incredible (I worked at the bucks for 6 months and have since then moved down the street to an independent coffee shop)

    Im not kidding you, we had a regular guy named Stan who was VERY wealthy, come in 2-3 times a DAY and get a modified drink order for himself, his wife and sometimes grand kid along with a pastry. That’s $10-$15 per VISIT with multiple visits a day. The guy paid the “salary” of at least two workers.

    Obviously this was our most extreme case but coffee shop “regulars” are a common breed even at my current shop. As a coffee enthusiast at 21 years old, I’m going to have to seriously rethink my approach when i get a new job and can no longer support my habit.

    Reply
  • Chris March 18, 2013, 6:44 am

    I’m sure someone has pointed this out to you before, but roasting your own coffee is a definitely win financially, *and* flavor wise.

    Sweet marias (www.sweetmarias.com) is a pricey site for green coffee, but even there the prices are mostly less than $7/lb. Most Brazils go for a little over $5/lb, and while you *can* purchase some insanely expensive coffees, for the most part it’s all reasonable.

    Furthermore, you can be certain that the people who worked to produce the coffee have been fairly paid, even more so than with Fair Trade certified beans. The person in charge of the site has relationships with many of the farmers.

    Further-furthermore, if you *don’t* buy from sweet marias you can get coffee even cheaper (although I don’t know how they source their beans). Overall it’s a win.

    The initial investment: probably zero. Do you have a hot air popcorn popper? How about a cast iron pan? Heat gun for paint? (Buy a dog bowl).

    The skills needed? Do you have *any* of the following:

    1. A sense of smell?
    2. A sense of sight?
    3. A sense of hearing?

    I know a blind guy who does it. And while I don’t know a deaf person who roasts, I’m know they can by smell and sight. Finally, if you’ve sadly lost both hearing and sight, I’m sure your sense of smell could steer you right.

    Reply
  • Rachel June 17, 2013, 11:33 pm

    I was just going to say the same – we home roast and pay about $6-7 per pound and love it! Sweet Maria’s is the best source and what you will find is that it’s a very zen (and mustachian) way to enjoy coffee. It slows down the process and gives you time to appreciate it much more. Plus, it tastes fantastic!

    Reply
  • Cari August 5, 2013, 10:13 pm

    My husband and I don’t agree on the whole paying for college thing. He had his paid for completely and was able to go to whatever school he wanted. I always say that I was allowed to choose anywhere I wanted to go as well – I just had to get a scholarship to wherever that was. (And I did.)
    So now that we have two wee ones of our own, college funds came up. He would like to be able to provide them the same opportunity he had, whereas I feel that if they have to pay for at least some of it they will have better ownership of their education.
    His argument is that we will have too much money for them to qualify for financial aid – and while merit based aid is available – it is a rarity.
    Any opinions on this?

    Reply
  • bob werner September 30, 2013, 9:30 am

    I buy black tea for 1 dollar per 100 bags. Lasts me a month. Taste better than coffee and is high in fluoride. Annual cost 12 dollars . Your Starbuckers are spending about 3000 per year or 300 time
    s our spending on caffiene!

    Reply
  • Matt October 5, 2013, 10:32 pm

    So I graduated from CU Boulder in 2011 and the annual tuition for a Business degree was about $16000- the information you linked in your post looks to be per semester, not annual. Your choice in coffee is superb though:)

    Try
    http://bursar.colorado.edu/wp-content/uploads/UG-Instate-2013-14-rev-with-spg-info051513.pdf

    for better numbers on actual cost of college.

    Reply
  • Kat November 17, 2013, 1:59 pm

    I love your blog, by the way! My best friend just got me on it as a way to help me with getting out of debt.

    In terms of coffee, I rarely go to Starbucks. However, I found that I have saved an ENORMOUS amount of money AND waste at home with my Keurig. I know that sounds impossible, but I’ll explain.

    My boyfriend, Scott, and I found that when we had a regular coffee maker we were going through coffee extremely quickly because no matter whether we brewed a full pot or a half pot, we still had loads of coffee left over to go bitter and stale and then poured down the drain by the next day. Scott begged me for a Keurig, but I was hesitant at first. The machines are expensive. Those k-cups can run between $10 and $30 per box, with about 24 cups in each. Each one is made of plastic and aluminum. Half of the grounds don’t even get used during the brewing process.

    So, we went to Bed Bath and Beyond with a coupon and looked at the options. What I found is that I could buy whatever coffee I wanted and pack it into a reusable metal k-cup! If I get the huge 39oz tin of coffee for $7.95 (Folgers, which isn’t my favorite), that lasts me almost 3 months despite drinking coffee every day. If I had gone with just buying k-cups, that would be $10 per month so that would cost me $30 at the end of 3 months instead of just $7.95. That’s a savings of $88.20 a year!

    My parents thought I was out of my mind buying a keurig. But when I only drink maybe a coffee or two a day, I save more money than they do! The $119 was a worthy investment AND I’ve reduced waste by using my own coffee. I’ve had the Keurig for two years and already made back the $119 and saved more.

    Sorry, coffee always gets me on my Keurig rant! Thanks for all the tips! I’m working on my MM and getting my boyfriend to work on his too!

    Reply
    • Mr. Money Mustache November 17, 2013, 7:27 pm

      Whoa, you had me scared with that Keurig talk, as those things are an awful scam – IF you follow their instructions and buy the Keurig coffee at 10x the price of regular ground coffee. But if you are refilling the thing, that is totally different.

      Note that there is no reason for normal coffee to go to waste either – you can brew one or two cups with a french press or by using the machine properly, or you can use a $40 Espresso machine like I do, which makes 2 cups at a time. And if you do miscalculate and end up with leftover coffee, keep it covered and in the fridge – it warms up just fine in the microwave and thus is not wasted, or serves as Iced Coffee for an afternoon shot of extra drugs.

      Reply
      • Kat November 17, 2013, 8:32 pm

        Definitely didn’t mean to scare you! I know, it is usually the opposite in most cases with a Keurig. But I told my boyfriend that I would only buy one IF we reduced cost and waste by buying our own coffee. It has been working well so far! It especially works out when my parents do a Costco run and pick me up a the huge bag of Dunkin Donuts coffee.

        I do LOVE a french press. You are very right, but the only problem I had with the french press is that he and I are extremely (like ridiculously) clumsy people. He bought me a FP for christmas and he broke it within 4 months, so we decided not to buy another.

        I haven’t ventured into the world of Espresso yet, but I plan to!

        Reply
      • T Schmidt November 30, 2013, 12:39 pm

        I am so glad to hear you use the $40 espresso machine MMM. I am amazed at the whole Keurig craze and the cost and waste drives me nuts. It only takes me a minute or two to put grounds in the espresso machine, toss in some water and put the mug underneath. No waste and the coffee is much better than anything I have had from a Keurig (which to be fair isn’t bad).

        Reply
      • Lrgibs01 December 14, 2013, 9:38 pm

        The cool kids are switching to the aeropress
        http://www.amazon.com/Aerobie-AeroPress-Coffee-Espresso-Maker/dp/B0047BIWSK

        I’ve used mine pretty much every day since last March. Super yummy, with Trader Joes Sumatra. I find that much more than 12oz. Goes stale before I can finish it. Do you freeze some of your 2.5lbs MMM?

        Reply
        • Mr. Money Mustache December 15, 2013, 8:04 pm

          Yes! I freeze the whole bag, and grind it out in little portions every few days. A bag lasts a month or two, making the whole coffee budget between $5 and $10/month.

          Reply
  • Youngil Jun December 30, 2013, 9:38 pm

    There’s only one thing I find in erroneous (just slightly) in this article. While annual inflation is on average about roughly 3% (though it’s 2.2% right now, and very well could continue to be so) education experiences annual inflation rates of about ~6%. Although, you’re investment with compounding would certainly still provide a huge chunk if not all, I think it’s worth noting the rate in which higher education increases in cost. (This is a stupid growing problem. Thank goodness for Khan Academy and Treehouse.)

    Of course, if something were to happen and the demand for social change occurred in such a way resulting in a deflation of college tuition…well, I’d just be super happy.

    Reply
  • Norm January 29, 2014, 2:17 pm

    I know this is about college, and I love my coffee, but you inspired me to calculate costs.

    Cost per tablet of Stay Awake caffeine pills from Walmart is 4¢. If you only want the caffeine, the pills are much cheaper even than home brew coffee. Plus, you don’t have to dump old coffee at the end of the week. This could be even more savings by eliminating the coffee maker, coffee, and additives (cream, sugar, vanilla, etc.)

    Just a thought…I won’t give up my home brew coffee, though.

    Reply
  • Nigel May 4, 2014, 8:29 pm

    An update for the 2013-2014 academic year: in-state tuition for CU-Boulder college of engineering and applied science is $13,529 per year. Most big state U’s are closer to $15K than to $10K.
    Front Range Community College, on the other hand, is $5,872 for 32 credits (a normal course load for one year).
    Even better, a year’s worth of college credits earned through CLEP exams will run you $640 – you can usually get most or all of your introductory and gen ed courses done this way, or by AP exams.
    IMHO, (and speaking as someone who teaches at a 4-year college), paying 4-year tuition for an introductory level, 300-people-in-a -lecture-hall type course is pretty close to paying $20 for a bowl of oatmeal at a fancy restaurant. Oatmeal is great stuff, I’m not knocking it – but buy it at Costco and boil it yourself.
    Save your tuition money for advanced courses at a good public university where you get resident tuition.

    One caveat: CC courses (not always) set a significantly lower bar – doesn’t mean you can’t learn just as much as at a more prestigious 4-year college, but you have to motivate yourself to really learn, and work much harder than you actually need to for a decent grade so that you are ready when you make the move up to “The Show”. I say this because I often get transfer students who earned A’s and B’s at CC, then flunk out of their advanced courses at my 4-year college.

    MMM: given how much money lots of people seem think they need to spend on a college degree for themselves or their kids, I’d suggest that this topic deserves another full-on, punch-in-the-face style post that you are so good at delivering. Along with housing and cars, higher education cost is one of the major impediments to stash-growing as far as I can see, and a topic where people are constantly exposed to truly ridiculous analysis and advice in the media.

    Reply
  • JeanyB June 3, 2014, 12:20 am

    Last year my son graduated with a Bachelor’s degree in Economics with a 3.5 gpa. We paid a total of $22,000 for his tuition and books for all 4 (almost 5) years combined. We also live in the Bay Area where most things are more expensive than elsewhere in the country. Many of our friends find it hard to believe that his Bachelor’s degree cost so little.

    My husband and I made a deal with our children concerning university/college. We would pay for it all up to a Bachelor’s degree level if they lived at home, attended a community college for the first two years, then transferred to the local state university for their upper division. Additionally, they had to get a consistent part-time job to pay their own commute costs, other related school expenses, and fun items/outings. We also bought all textbooks used or digital to reduce costs and were sure to resell them back when classes ended. If they did not earn a passing grade in any class, then they would be responsible for all fees/tuition associated with retaking the class.

    If they chose to go to another university out of the area, then we would only pay the first $20,000, and they would be responsible for the rest via scholarships, loans, job income, etc.

    Fortunately, both our children saw the financial sense in graduating debt free so they both attended local colleges/universities and lived at home for free. Our daughter earned her Associates Degree then married and found a decent job that only required 2 years of college – so she has not yet continued on to the university.

    Often finding a good job isn’t just about the name of the university. It seems to be a combination of luck and willingness to seek opportunities mixed with education major, degree(s) earned, gpa, university name, work/internship experience, a well written resume/portfolio, and a likable personality.

    I know some people look down on state university degrees, but it has served our son well so far. He found a good job immediately upon graduation that he really enjoys. It has excellent benefits (including a pension if he stays a minimum of 10 years), offers him fascinating opportunities/experiences, has great growth potential, and pays about $60,000/year. He just recently purchased a 3 bedroom home and is only 23 years old. He is happy with his choices.

    One of my children’s friends attended UC Berkeley, had a 4.0 gpa, and received two job offers before graduation with $80,000+ salaries. This friend should have little problem repaying his loans so it was a good choice for him. Another friend who went to a prestigious private university on the coast is currently trying to pay off a $100,000 loan on a $35,000 salary. A third friend had $80,000 in student loans and it took over a year for him to find a less than desirable job just to pay the bills. All 3 went to “prestigious” universities. One got the high paying dream job while the other two are struggling with their choices. So, a prestigious university doesn’t always guarantee you the best high paying job.

    Reply
    • Mr. Money Mustache June 3, 2014, 10:43 pm

      Great story! I particularly like the way you and your own kids handled the education.

      Reply

Leave a Reply

To keep things non-promotional, please use a real name or nickname
(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!

connect

welcome new readers

Take a look around. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article.

For more casual sampling, have a look at this complete list of all posts since the beginning of time. Go ahead and click on any titles that intrigue you, and I hope to see you around here more often.

Love, Mr. Money Mustache

Ads

$25 Unlimited Smartphone
The Lending Club Experiment
A $500 Signing Bonus... WTF?
How to Start a Blog

latest tweets