I bet that title flustered some feathers huh? Well it should because I am a proponent for making your kids pay for their own tuition. I’m not saying this out of spite, but from experience. This concept may be challenging for you, but I think it’s a great topic to cover. Who knows, you might change your opinion by the end of this article.

I’ll start with my college experience. My parents and I had an agreement. I was responsible for paying for my tuition and my parents would pay for my textbooks. To give you a grasp on these expenses, my yearly tuition for college was $7,500 and my yearly books came to $1,000. From a young age, my parents taught me to refuse debt and always pay things in cash. Tuition was no exception. From day one of college, I made it my goal to pay my tuition in cash each quarter and graduate college debt free. With such a huge expense ahead of me, I decided to join Air Force ROTC. I ended up getting a tuition scholarship my first two quarters of college. I did end up switching majors and quitting ROTC, but joining up for a time did help for that time frame. As a side note, ROTC was a blast while it lasted, and I highly recommend anyone to join if they want to become officers in the military. It just wasn’t God’s plan for me.

It’s important to point out that from the on-set, I made this a long term goal. This would never have happened if I thought short-term. During those four years, I learned a ton about myself and matured faster than the average college student. When parties were happening on the weekends, I was working. When college football games were going on, I missed them (only got to go to 2 games in four years!). OK, OK, it wasn’t that bad. I did have a blast in college, but I did have to sacrifice certain things to pay for my college.

It’s amazing what a little financial strain will do for your thirst for conquering a goal. I ended up starting my own furniture moving company on the weekends, had multiple paid internships, and even did landscaping jobs for neighbors. I ended up graduating college debt free. God gets the glory on those, doors were opened and I definitely felt blessed during those times and still do today!

Looking back, having such a financial burden molded me into the person I am today. I’m just as frugal today as I was in college. Habits like spending less than you earn, going the extra mile and seeking out deals instead of paying full price are habits that are now ingrained in the way I live my life. Do I wish my parents paid for my college tuition? No way! To be honest, I would probably still be in school and sitting on a couch with zero inspiration to better myself… So yes, I’m glad my parents never saved or paid paid college tuition. So that’s my story, I hope you enjoyed it.

This brings me to my four key points for why I recommend parents avoid saving for their kid’s college tuition.

1-College doesn’t cost as much as the media tells you it does. Look, the reality is this. If you want affordable tuition for college, go to an in-state public university or have them enroll in some online college courses. I know, I know, but you want your kid to go to the “best of the best.” Well, here’s another reality check! For the vast majority of students that attend colleges like Cornell, Stanford, or MIT, the return on investment is terrible! I won’t go into details, but I make significantly more than my friends who attended private colleges. Hmm, let’s do the math on that one. They have loads of debt and don’t make that much out of college. I think my situation wins big. So here’s the deal: send your kids to community college for the first two years, then transfer them to an in-state university. This is your best bet and it provides an opportunity for your kids to pay their own way through school. Going the cheaper route will free up money post-college for a down payment on a house or buying that car you’ve always wanted.

2-You have to look out for “numero uno.” It sounds selfish, but it’s a rather good point. Saving for your own retirement future is far more important than paying for a fancy school for your kids to go to. Your financial goals come first. I’m not saying that you shouldn’t help them at all. I’m saying that you should plan for retirement, THEN help your kids as much as you can. An important thing to remember is that your kids can always get a student loan. You will never be able to get a retirement loan because they don’t exist! Invest in yourself first. The sooner you learn this the better.

3-College savings plans are rather poor. If they were significantly better, then yes, I would possibly consider helping my kids pay for their tuition. Unfortunately, college savings plans are terrible. For one, you don’t know your future income levels, therefore you don’t know your future tax brackets. You don’t want to be in a position where you are missing out on tax benefits. Also, college saving plans really limit you on how you can invest your money. College savings plans have way more negatives than positive. Steer clear of these plans and make your kids pay for their tuition!

4-By making your kids pay for their tuition, you are actually being better parents and showing them true love. Good parenting is teaching your kids life lessons that will stay with them for a lifetime. Bad parenting is pleasing your kid’s every need and request. Your kids might give you some flack for not paying their tuition (I know I did!) but they will thank you when they’re older and financially secure because you made them pay their way. I am thankful to my own parents for making me pay my own tuition. It really did change me for the better.

I’m not the only one in my family that has gone through this life changing experience. My little brother is going through the same struggles and financial dilemmas. Thankfully, he heeded my parents wisdom. He attends a small community college and plans to attend a large University. He works his butt off just like I did and pays his tuition with cash. He has had to make the same sacrifice that I did and still lives at home. It’s just another example of discipline and the desire to refuse to go into debt. I’m proud of my little bro!

In closing, American families have fallen into the trap of taking care of every need of their kids. We need to bring back “old-school values” and make kids work for their education. A college education is not a right, it’s a privilege. It’s a touchy subject, but one I felt that I needed to write about. Comment below with your thoughts on this subject!

I was asked recently about the differences between traditional 401k plans and Roth 401k plans. I then realized I didn’t have a solid answer. Truth be told, I had to do a little research on the subject. I’m not going to bore you with this article. This one is going to be straight the point. Want an easy answer? Well, the Roth 401k is a great choice for almost everyone. Let’s get into the details before you make any hasty decisions!

What is a Roth 401k anyways?

This is easy. It’s just like a typical 401k, but with some minor differences. A Roth 401k acts in the same way in terms of your boss managing your plan. Also, just like a typical 401k, money is taken out of your paycheck and placed within the Roth 401k plan. Once in the Roth 401k, you control the investment choices.

But what about the differences?

This is where it gets a little tricky. The money that goes into a Roth 401k is post-tax $’s. It’s both a negative and a positive. It’s bad because your taxes are higher now. The good is that you will never have to pay taxes on your distributions during retirement.

Another key difference is that you won’t have to pay taxes when you withdraw money after you’re 59 1/2. Yes, you read that right. You pay zero taxes when you withdraw during retirement! Sounds good to me. There’s one big BUT though. Unfortunately, you cannot withdraw your Roth-401k contributions. I mean you can, but you’d be facing stiff tax penalties.

Now, for the DEBATE! Taxes, taxes, taxes. This debate comes down to the pre-payment of taxes. With a Roth-401k, you pre-pay taxes now so you avoid paying taxes later. With a 401k, you avoid taxes now and pay taxes later. The goal is to lessen your tax burden of your retirement accounts. We could go on and on about the tax benefits and downfalls of a Roth-401k. I’ll let the Finance Buff explain the tax side of the debate, as he is much more knowledgeable on this subject. He presents a great case to NOT contribute to a Roth-401k, but I disagree with his view of future taxes. With the way taxes are going up now, crippled economy, and the fall of the dollar, I foresee extremely high taxes 30+ years from now.

So, how much can you contribute to you sweet Roth-401k? This is the best part. Unlike a traditional Roth-Ira, you can contribute a maximum of $16,500. But what if I make over $100k you ask. Man, I wish I made that much haha. Well the good news for you rich folks is that there are no income limitations for a Roth-401k. You could be a multi-millionaire and still contribute. But then again, you probably don’t need to worry about retirement accounts anyways…

Another key benefit is the rollover option. Let me give you an example. Say, a dude named Joe is working away at corporation ABC and he is actively contributing to his employer’s Roth-401k plan. On Monday, he finds a pink slip at his desk and now he’s fired. What happens to his Roth-401k contributions?! The good news is that Joe can rollover his contributions to an individual Roth-Ira and maintain tax-free growth. This is king in an economy where you never know if your job is secure.

Hmm, as for taxes, do you remember President Obama spending trillions of dollars out of thin air? There WILL be repercussions for the out of control spending. Guess who will be paying for it? You and me, that’s who. So protect your assets and retirement future by contributing to a Roth-401k today. Remember to keep a well diversified portfolio and invest for the long-haul. Get to it!