Should I first save for my kids' college, or my own retirement?
Our modern day society seems to be very adept at adding pressure to our lives. Any of the following sound familiar? Buy a diamond ring with 3 months' salary or you’re a cheapo, setting a bad precedence for your marriage. You must save for your kids’ 4-year college education or you’re a failure. Ouch, that’s a lot of pressure…especially with education costs these days at 4-year universities.There are many other factors.
Are your own finances in order? Is all unsecured debt paid off? Reserve funds in place for job loss or major medical expenses? Are you prepared for your next car purchase, or inevitable maintenance costs on existing cars? What about your own savings and retirement? Is that in place?
It’s a great idea to save for your kids’ college education. But not if it compromises your own personal finances. What do they say on airplanes? “Secure your own oxygen mask before those around you”!
The same goes for finances.
Do this out of order, and you may end up being one of the many who help pay for their kids’ college, and then the kids later need to help their parents survive in old age. Your kids would rather take care of themselves now, than take care of you later!
Besides, if you never get to the point of saving for your kids’ education, they still have many options:
- Go to a community college for the first two years; and then transfer to a four-year school.
- Pay for their own college with a job.
- Get financial aid, or even consider student loans.
And while we’re not big fans of debt and massive student loans, remember that you can’t get financial aid for your retirement. If you’re retired, you aren’t paying for your own way with a job. You likely can’t even get loans without being able to show qualifying employment income.
Just thought we’d alleviate the pressure you may have from feeling like you must save $100,000 for your kids’ education!