This xkcd comic has always been true, I suppose. But it seems even more true after my advisor started talking about his daughter getting into a rather expensive private school for college.
I checked the costs was flabbergasted. I, only graduated from college 4 years ago, but the entering freshman yearly costs are about 1.5 times what I remember, at least at elite colleges. That’s a big increase for 4 years. It corresponds to a roughly 8.5% yearly increase in tuition/fees even when inflation was around 1-2%. (Core inflation, I mean, which ignores food and energy prices.)
The particular place his daughter is going to costs (including the likely tuition increases over the next three years) a bit less than $60,000/year. So a 4-year college degree is $240,000.
Think about that in terms of a 30-year career. That means that kid just cost $8,000/year-ignoring inflation. If we assuming constant 2% inflation for 30 years it’s “only” $5,650/year in 2011 dollars.
Either way, that’s a lot of money to be setting aside for 1 kid every year for your entire career. And that’s just for college.
This might not sound like a huge deal, for people making $70,000 to $120,000 a year. But living in non-small town midwestern areas of the country can be fairly expensive. For example, because of housing (and, essentially nothing else) the equivalent pay in San Jose, CA to $40,000/year in my hometown is $80,000. (According to this cost of living calculator.)
Anyways, back to my original point. Kids are F-ing expensive. I’d rather have a nice condo with a balcony. And I think a balcony should totally be doable with an extra $450/month to spend on rent because I’m not worried about some kid going to college.