Baby Math with Mr. Candy: DC Isn’t the Only Place with a Budget Crunch
Aug 4, 2009 | Filed Under: Candy's Column,Featured,Mr. Candy | Tags: Baby Math, Finance, Mr. Candy, Yikes
Baby Math
With Mr. Candy
Not being the creative one in the family, I could never hope to capture in words the joy and happiness I experienced when I first saw Skylar. The love I feel in my heart is indescribable. However, as the “economical” one in the family (some less “economical” would say “cheap”), I am unfortunately fully capable of calculating the cost of Skylar. Even though she’s of course priceless, the pain I feel in my wallet is all too calculable.
Candy will undoubtedly be sharing the joy and happiness in our hearts, so I will share something less precious: the pain in our bank account. A pain that is especially acute when thinking about the cost of college when Skylar is due to attend. As a consultant, I ask that you indulge my love for finance (some less “financially minded” would say my “inner geek”) and allow me to share that pain with you in my native tongue (that would be bullet points and charts).
- The current annual cost of an Ivy League education with room and board (OK, so I have high hopes for the little one) is $48,147.1
- Over the last 10 years, the average annual increase for college has been 6.0% per year. 2 Using that rate, by the time Skylar goes to college in 2027, four years of school will cost $601,194.15. Yup, that is right. $601,194.15! In case you are wondering (or hoping), that is US dollars, not Mexican pesos.
- Vanguard’s S&P 500 Index fund has returned an average of 10.19% per year since its inception in 1976.3
- At that rate, we would have to put away an extra $756.41 per month, every month starting today to afford to put little Skylar through college.
- To find that kind of dough, our budget is going to have to change… DRAMATICALLY!
Ed. note: This budget reallocation has NOT been approved by Candy. To hell with electricity and water, I say — Mama needs a new pair of shoes and margarita fix!
1 http://cgi.money.cnn.com/tools/collegecost/collegecost.jsp?college_id=9334
2 http://www.naicu.edu/news_room/private-college-tuition-rises-at-lowest-rate-in-37-years
3 https://personal.vanguard.com/us/funds/vanguard/all?sort=name&sortorder=asc
Gina from Oregon
says:
Good job with the numbers Mr Candy altho this is very depressing!! I guess I’ll have to send my son to the School of Hard Knocks instead of college.
August 4th, 2009 at 2:39 pm -Ryan
says:
Mr. Candy,
Good job on the new budget! My pleas for a new budget have fallen on Mrs. Ryan’s deaf ears. Yes, I’m cheap, too.
I hope things work out that you can re-establish the liquor fund. You’re going to need it as she gets older…..
August 4th, 2009 at 4:44 pm -Alex
says:
What’s a budget? I just swipe those little card things and the nice people in the shops give me pretty things.
August 4th, 2009 at 5:48 pm -Zay
says:
lol @ Alex
August 4th, 2009 at 9:40 pm -Rebecca
says:
In other words, a Million Dollar Baby.
August 5th, 2009 at 6:30 am -Whitney
says:
5% on Kitty Food! Those critters know how to put it away!
August 5th, 2009 at 6:48 am -AngelaPA
says:
15% on liquor – hysterical!
I’m extremely depressed… as we were told that the estimated money needed for 4 yrs of college (at a state school) for our daughter (who is now 2) is $116,000!!!! I guess she’ll be working her way through school. I did it, so can she! well I just hope she chooses to go to school
If not, we have a nice retirement fund.
August 5th, 2009 at 7:17 am -helloandie
says:
outstanding article. but candy, how on EARTH did you get your husband to allocate 10% of the budget on pretty clothes for you in the first place?? you must share this secret!
August 5th, 2009 at 8:03 am -Candy
says:
@AngelaPA — One of our friends asked Mr. Candy to calculate the cost of a state school. Here’s the (equally depressing) low-down:
UCLA (assuming in-state tuition which is $0) would be $264,716.72 for 4 years starting in 2027. That would be $333.06 per month, every month.
@helloandie — The “secret” is not asking for permission! But now that Skye is here, I’m apparently going to have to go naked. I’d like to extend my apologies in advance, world.
August 5th, 2009 at 4:50 pm -Debutante
says:
THIS is why I don’t have kids !! I need my liquor and clothes !!
August 8th, 2009 at 11:50 am -Strieder
says:
This is the MOST AWESOME ARTICLE EVER.
September 15th, 2009 at 9:21 am -Brian
says:
Teach her how to throw a mean, 92-mph slider from the left hand side and college is all taken care of my friend…
September 16th, 2009 at 3:32 pm -