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Ask Dave

This Bachelor's Degree Is a Luxury

Mike says his wife would like to complete a bachelor's degree. Mike disagrees that it has financial value because her goal is to be a stay-at-home mom.

QUESTION: Mike in Utah is calling because his wife would like to complete a bachelor’s degree. Mike disagrees that it has financial value because her goal is to be a stay-at-home mom. Dave tells Mike there’s a utilitarian value to it, but his wife seems to want this more as a luxury.

ANSWER: There are two possible reasons to get an education, and really both apply in any situation but different weight of both . One is the utilitarian reason for getting a degree, which is why most people get their degree. What you’re talking about is I’m going to spend money, get a degree, and it’s going to make me more marketable in the job force, and therefore I’m going to make more money, so the return on investment is there. Obviously, if you’re going to be a full-time mom, there’s not a cash return on investment.

That brings us to the second reason people get a degree, which is the “inherent value,” which is more like the quality of life is better because I see things deeper and richer because I’m more knowledgeable. I can appreciate art if I’ve had an art appreciation class. I can understand literature if I’ve studied literature and not simply just read it—those kinds of things. Your life is richer and deeper the more knowledgeable you are and more study that you do. It does have a value, but that’s not a utilitarian cash-on-cash value.

That second reason for getting a degree is just fine. That’s a perfectly valid reason to get a degree. That, however, is what’s known as a luxury financially speaking, which means that we would have to have our other family goals met before we spent money on a luxury. For a family to sacrifice deeply or to go into debt or to not be funding retirement or not be this or that—something very important in the financial arena—not taking good care of their future, not save money for their kids’ college so that you can get a degree just to have a richer life—that’s what’s known as selfish then. If you’re in really good shape, you’ve got a pile of money, you make $100,000, she’s a stay-at-home mom, and she wants to get the degree and finish it, yeah, write a check and get the degree.

I think she does this after you get out of law school and you’ve passed the bar and your family’s doing well financially. At this stage of the game, you guys are broke. We don’t write checks for that right now. It is a valid reason to get an education, but it is a luxury at that point because your family has to meet your utilitarian needs before you deal with quality of life. I think it’s a good thing to do. I absolutely do. My wife Sharon did that, by the way. She finished up her degree after our first child was born. She was a full-time mom the whole time. It was well worth it, and at that point in our lives, that particular moment, we had the money for that luxury, and she did do it. I’m glad she did. It was a good idea.