… and yes, an integral part of financial fitness!

Welcome to September, the month in our year that school commences for those enrolled in formal education. In America, we value education and devote considerable time, energy and resources to becoming educated beginning at an early age. By the time a young adult graduates from four years of college, he or she will have spent seventeen years, (including a year of Kindergarten) in school. Many add to this bank of knowledge with formal education in the form of advanced degrees. The financial investment in education is significant and depending upon the choice of school (public or private) the cost can be higher. According to 2011 statistics for Massachusetts schools, a family contributes approximately $220,000 for private schools or $90,000 for public, including the compounded 5% annual increase) to educate one person through four years of college.

With significant rising college debt, it is common and necessary to measure the benefit of education costs in relation to future earning power. While I recognize the rationality of this measurement, I wonder how helpful, or perhaps how partial, it is in discerning the value of education.  I also wonder how education planning became limited to college planning, by parents for their children.

Contrary to previous generations, in which one went to college, learned a vocation, profession or trade, and stayed in that field for an entire working career, we will engage in at least three careers in our lifetime. Consequently, our concept of education needs to expand its limitation to young adults (18 to 21 years), and include all age groups. Not only do we plan for formal college, but we need to plan for continued education in myriad forms. We continue to grow, change, follow life interests that are very different from 20, 30, 40, 50 years ago when we attended college. Are you still working in the field for which you were trained in your early twenties?

Education, whether formal or not, is a lifelong experience. Recently I examined the balance sheet of life pursuits, with accompanying education (formal and informal), and the costs associated with growing (mentally, emotionally, spiritually, socially, physically, etc.) as part of necessary expenses on a lifetime journey. We are called to include education (or growth potential, or passionate pursuits) in our annual spending plan.

There is no other investment more important than an investment in you. This year, as the school year unfolds, consider how you want to allocate your resources and when planning your investments in capital assets, include you – your human capital – as one asset category to fulfill. Consider many opportunities for education. Earmark a fixed number or a percent of disposable income as your education investment. Don’t fret over the “right” or “correct” allocation, just start with something.

An investment in YOUR education is priceless. We’ll explore investment next month. My new area of wondering.