Fewer Toys--More 529s
A recent study that made it’s perfunctory rounds on social media has me thinkin’. We apparently now know what many have been suspecting over time. Fewer toys boosts children’s creativity. It is mainly from a decluttered space, but also kids end up using their imaginations more.
Fast forward to the typical birthday party. Imagine the giant cart of toys heaped with beautifully wrapped gifts, and all the plastic wonder inside. Plastic that will end up like the closet in my kids’ room—in piles of broken toys, mismatched play sets, or just toys that never got any love.
Please do not detect in this whole thing a hint of judgment. This momma is prone to heading to the toy store on any day of the week to see the joy light up in my kids’ eyes. But what’s funny is I am married to the opposite. This past Christmas, he was monitoring the presents being opened, and his concern for the youngest who was in tantrums through the middle of it, found a way to sneak her BIGGEST gift, a large art easel that was pretty expensive, upstairs to the attic. Our new plan is to give it to her in August for her birthday.
I was pretty horrified and disappointed. I wanted to see her tantrum go away momentarily enough for her eyes to light up when she opened it. And how could he take away a gift? Don’t all kids deserve such abundance at Christmas?
Another article then started circulating this morning that a billionaire alumnae of Morehouse College promised to pay off all the debt of the graduating 2019 class. Deep in the article listed one graduate who actually had $90,000 in debt—for an undergraduate degree.
The president of the college said this "When you have to service debt, the choices about what you can go do in the world are constrained," he said. "(Smith's gift) gives them the liberty to follow their dreams, their passions."
The average student loan debt load in America is $40,000. And this is being taken on by students from all socioeconomic backgrounds. College inflation has tripled the rate of inflation. The price tag goes up, and for some reason we still pay it. But it’s mainly the kids who take on that debt at 18 who pay the price through fewer options, handcuffed to work a job they hate and the inability to dream past the debt.
Ok, enough of the badness. Here is an idea, and I want this idea to get a serious consideration. What if we parents collectively thought bigger about teh $20 birthday gifts and general gift giving, and viewed those gifts an opportunity cost for giving kids what they truly need—the ability to take on less debt in college and have more future choices after college?
I just ran some quick math. Assuming a 5% rate of return in a 529 account, a $200 monthly contribution over 17 years would yield $84,000, versus a $100 monthly contribution that would yield only $42,000. Imagine a world where parents exchanged 529 gift cards with a sweet note to put in the kid’s memory boxes about their excitement to be part of them going to college.
Is it crazy? I realize it is. I have been trying for years with not so subtle hints to get grandparents to take this on. This past Christmas close family members did it. They gave a very generous gift to my kids for college. We stuck it in there in January, and when the statement came for the first quarter, I had to blink when I realized what an impact it made on their accounts.
Of course my kids had no idea what was going on and why it was such a big deal. But one day they will read their little notes tucked away in their memory boxes, and they will know.
Could we act collectively to think bigger about what our kids need? Could we heed the research of toys, see the college train barreling down the track, and make this the moment we dare greatly to do something significantly different?
I truly don’t have a fully formed opinion on this, but my goal this week is to have a more organized way to at least approach family about this.