About 74% of women say it's very important for their kids to go to college and get a degree, according to a new OppenheimerFunds Inc. survey. But in many cases, women spend a lot more time preparing their children to get into college than figuring out how to pay for it.
According to the poll, women often leave the financial planning for higher education to their spouses. Of households planning financially for college, women took primary responsibility for the planning 65% of the time, compared with 85% of men. Women also determined who will pay for college 67% of the time, compared with 77% of men.
"I think if it's a two-parent household sometimes you have to split the work," Donna Winn, president and CEO of OFI Private Investments Inc., told WalletPop in an Interview. "But I also think a lot of us get caught up in the things that are day-to-day. It's a little easier for us to do that in the sense that you address the immediate need, and then by not addressing that future need you leave a big hole in what your kid can do."
Winn said that many women focus on the daily tasks that get their kids through school, such as attending parent-teacher meetings or helping with homework. "Those are things we can do pretty simply and pretty easily. But you don't put it into context and think 'if I don't start saving now I won't be able to pay for my kid's college education.' "
Women (56%) are also less likely to know how much their household has saved for college, compared with men (65%). Furthermore, women (40%) are less likely to have a college savings goal than men (46%). About half of the women polled gave themselves an "A" or "B" grade for overall college planning efforts, but nearly 50% gave themselves a "C" or worse for their efforts to save for college.
Single moms also face challenges with planning ahead for their kids' education. The survey found that four out of 10 single mothers said that, compared with married mothers, it's less likely that their kids will go to college. But about 35% of single moms said they are more concerned about getting their kids into college than with their own retirement.
Not planning ahead for their kids' education expenses is putting many women's financial future in jeopardy, according to Winn. Often when parents don't plan ahead for college expenses, they end up using their own retirement funds. Although many financial experts advise parents to save for their own retirement first, Winn said it's important to plan ahead for your kids' education costs if you don't want them to struggle financially.
"For retirement you can keep working and supplement your savings. But when your kid is 18 years old and it's time to go to college, if you haven't saved that money, they either have to defer college, which defers their ability to go out and earn a living, or they have to take out student loans, which will burden them after they graduate," she said. "Nobody wants to do that to their kids ... It prevents them from moving forward economically with their future. It's almost like they have a mortgage already, but don't own a home."
The best case scenario would involve parents putting away money simultaneously for retirement and college expenses, but that can be tough for many families to do. Only 10% of the women polled strongly agreed that they have a good plan for paying for their kids' education and funding their retirement. About 62% of women said paying for college "will significantly impact my ability to save for retirement."
Moms who want to become more educated about paying for their kids' education can get tips and tools on the College Within Reach Web site. The earlier you get started with financial planning, the better off you'll be in the long run. "Women are typically the key force getting kids ready for higher education ... But preparing kids academically for college without planning for how to pay for it is like designing a house with no money to build it," said Winn.
Moms want kids to go to college, but few plan how to pay for it