What to do with a $40,000 college fund when your child skips college
As seen on the 24/7 Wall St. homepage on October 21, 2026.
If he's not going to college, use it for trade school. Failure to do either of those in today's world is setting you up for failure.
A $40,000 education gift with no student attached is a planning problem: 281 comments split between trade school, a delayed handoff and routing the money into a Roth IRA. Liquidating early is the one move parents say they regret.
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User kungfuringo on r/personalfinance laid out a situation many parents quietly face: one child received $40,000 toward college from an older relative, but has decided not to go. The parents are not planning to hand over the cash directly, partly because the child is not yet considered responsible enough to manage a lump sum, and a transfer is not planned until 2028.
The post drew 281 comments and 165 upvotes, making it one of the more active threads in the subreddit. The top response, from KCPilot17 with 773 upvotes, pushed hard for trade school as the natural redirect, arguing that skipping both college and a trade is a setup for long-term financial difficulty.
Other commenters pointed to a Roth IRA strategy, suggesting the parents max out the child's contributions over several years rather than handing over a lump sum. A house down payment and supplemental payments spread over multiple years for trade or trucking school also came up repeatedly as structured alternatives to a one-time transfer.
Several parents in the thread warned against moving too fast. One described letting a college fund sit untouched while a child flip-flopped between plans, only to find that early liquidation decisions became costly. Another said a fund left to grow eventually covered both a house down payment and a community college degree when the child returned to school at 26.
The commentary accompanying the post noted that liquidating early is the one move parents say they regret, and the thread reflects that tension clearly. With a two-year window before any transfer is planned, the consensus leans toward patience and a structured vehicle over a straightforward cash handoff.