Saving for after college?

[Chris in VA]

Do your kids have a savings plan for after college? IOW, how will they handle the interim between graduation and first post-grad job?

I know some use up a school loan, some borrow from parents (or are gifted), some move home and then work and save for an apt, and some work all thru school and graduate with enough savings to float while looking for a job and an apt or living arrangement.  And some are married, but I don't mean them. 

It just costs so much to put first/last/security deposit plus food/gas/insurance etc.

I am hoping dd is able to save 5K or so to launch with. I got married and we used wedding money til we got jobs. 

[Pawz4me]

We've been fortunate to be able to cover the cost of our boys' college. So they've been able to save their money from paid internships and part-time jobs. Youngest DS also has quite the nest egg from birthday and Christmas gifts he's saved over the years that I seriously doubt he'll spend before he needs an apartment of his own. DS23 had some college graduation money gifts from relatives and some of our friends. That said, I did help him out by doing a bit of housewarming for his first apartment of his own (the one he had in college was furnished). I bought him a mattress, all the essential cleaning supplies I thought he'd need,  some non-perishable food supplies, laundry detergent, shower curtain, toilet paper, paper towels, etc. I gifted him a few still-good-enough bath towels and dish towels. He had a job lined up almost a year before graduation, so he knew he was going to be staying in his college area and had all that time to decide where he wanted to get an apartment, knew what his budget would be, etc.

[catz]

Honestly, as a parent we’ve anticipated this as a possible budget line item.  Along with the possible need for an extra semester or 2.  We were super happy when a couple schools with surprise merit came in as lower than expected.   I hope he will have some savings but if he has nice internship opportunities, etc I’d like to allow for that too.  And I want him covering and budgeting some during college.  

[fourisenough]

My oldest will graduate with her BSN next year. Her plan is to move home to work/save money for two years before graduate school. She will need to pay all her own expenses (phone, car/insurance, OOP medical expenses, etc), but we will not charge her rent so that she can hopefully save enough to support herself through a 30-36 month doctoral program. Her contribution to the household is doing the grocery shopping and much of the cooking. Fair-deal from my standpoint; I’m tired of cooking and she’s better than me anyway! 

Luckily, with a nursing degree, she’ll have no trouble finding well-paying job immediately upon graduation.

[regentrude]

5 hours ago, Chris in VA said:

Do your kids have a savings plan for after college? IOW, how will they handle the interim between graduation and first post-grad job?

There was no interim. My DD started her job two days after graduation.

If I recall correctly, we may have lent her the security deposit for the apartment. She had a few savings from her TA job and summer internship.

[teachermom2834]

I expect my kids to need a little help at that time so I will plan to step in and help out. Actually, we had that situation this summer as my college junior was out of money at the end of the semester and was also moving into a new unfurnished house he was renting and he had a couple weeks until his internship started. He’ll be fine for the rest of summer and next school year but he did have a month he needed help. He also has a job he can pick up hours whenever he wants (he valet parks) so he did that until the internship started. He also lived as cheap as possible during that time. 

Honestly I kind of plan for that and anticipate it as part of the college expenses. We work together from multiple sources to get that done and I expect we’ll handle that the same way. (He works, we help, live on a shoestring, etc). Transitioning to the real job might be easier as he intends to stay in the house.  But a move from one location to another or setting up a home while waiting for paychecks to kick in does generally take some money so definitely smart to anticipate and plan for that.

[katilac]

They don't have a savings 'plan' but they do save when they can. We plan to help as needed, including, but not necessarily limited to, living at home rent-free. 

Another substantial expense you didn't mention is a car 😮

 

[Bootsie]

DD's first job was in a foreign country and started a couple of months after graduation (she could not apply for the work visa until she had her diploma in hand).  She lived with us in the interim; we did not charge her rent for those two months; she covered her other expenses through a combination of savings, working some odd jobs, and selling some of her college items, like dorm fridge.  Her employer helped her with some of her relocation expenses and loaned her an apartment deposit/first month's rent.  

If we had a child who had a good job in a location that was going to require substantial relocation costs and deposits, and the child had a solid budget and career plan then we would make a loan to the child and would probably provide some support in the form of a graduation gift. 

My undergraduate school made small, low-interest loans to graduating seniors to purchase a suit for interviewing, pay to move, etc. That was in the era of double-digit interest rates.  I don't know if they still do that or not.

I had a friend who graduated in May and was going to begin a job in September.  After a lot of calculations she found the cheapest way to live in the interim (with her family was not an option) was to go backpacking across Europe and stay in hostels!

[Hoggirl]

I assume that ds had some monies left from his paid summer internship before his senior year, though he had to feed and house himself during the internship.  That salary was pretty good as it paid the equivalent of what their pro-rated, full-time, just starting out salary is. That is the job he returned to the fall after graduating. 

That said, ds finished his course requirements a quarter early.  He remained on campus for the spring quarter  and worked for an online tutoring company and prepped for the GMAT.  We gifted him the spring quarter tuition, which was pretty significant.  It gave him a nice nest egg to start with.  We were happy to do it.  

He also did quite well on a financial investment (that we would NEVER have invested in) purchased his freshman year and sold in January of his senior year. He would have made a bit more on it if he had sold in December, but waiting until he was not going to be a dependent for us avoiding the kiddie tax.  Plus, putting into that year when he was only going to have three months salary also reduced the rate the gain was taxed on.  We are big tax strategizers.. 

He had a gap of about three months from graduation until job start.  He traveled to SE Asia during that time - very cheap living. Fortunately, a local to his school and future job state friend stored his car, but he did have to pay for a storage unit over the summer.  There are definitely added costs if the graduating student lives far away from the parents’ home base and is not returning their for work. 

Edited June 5, 2019 by Hoggirl

[Kareni]

On 6/2/2019 at 10:16 AM, Bootsie said:

DD's first job was in a foreign country and started a couple of months after graduation...

This was also true for my daughter who went to South Korea to teach English to children. Her position included a small studio apartment with a bed and some kitchen ware. She was also provided a plane ticket.

Regards,

Kareni

[DawnM]

We aren't there yet, but we have strongly encouraged our boys to live at home after college graduation and work and save up their money.  We won't ever charge rent, but we will expect them to be saving the equivalent of rent so that they can launch well (buy a house, etc... when they are ready.    

We will see.  

We would love to provide them a downpayment on a small house or townhouse, but I am not sure we can do that for all 3 boys.  We can provide some, but not all.

As far as paying for college, we said we would pay the equivalent  of NC State per year but anything beyond that is on them.  One son is at an expensive private school and he knows that he will be responsible for the surplus (about 10k per year) when he gets out.  Second son is in the local 4 year college and his program may be a 5-6 year program, but it is much cheaper, so we will pay.

[Chris in VA]

Wish dd could get an intern job!  Not w music ed, though, and if she lands a ME  job, it will start in Aug or September.  She does have a car, thankfully (but it is dh's former car and is a 2003--hopefully will last into her first post-grad year).

[linders]

Here is DS18's unhelpful reply...He is convinced that he will be so sought after in the world of finance after college that he will be living off the signing bonus a company offers him when he starts work the day after graduation.

DH rolls his eyes and says we will keep his room open and he can pay off rent in chores.

[katilac]

On 6/8/2019 at 6:16 AM, linders said:

Here is DS18's unhelpful reply...He is convinced that he will be so sought after in the world of finance after college that he will be living off the signing bonus a company offers him when he starts work the day after graduation.

DH rolls his eyes and says we will keep his room open and he can pay off rent in chores.

I actually do know two graduates who got signing bonuses this year, and they're not even in finance!