It’s no secret that we all share the common goal of ultimately living a happy life. In almost all cases the approach to such a life is gaining an education and entering a career that will sustain a lifestyle that we consider to be happy. The path to achieving this life goal seems to inevitably revolve around money. When you have a family, the two largest components of ensuring a happy lifestyle are saving for retirement and sending your children to college. Because the two tend to creep up at nearly the same time, financial stress and fear often result. The good news is there are ways to fulfill these lifetime goals.
Consider Retirement First
Saving as much money as possible for your children’s education is something every parent aspires to do, but your own retirement shouldn’t be sacrificed in the process. Always remember that numerous scholarships, loans, and grants are offered as options to help your children get through college.
In the long run, a secure financial future for yourself is actually one of the best gifts you can give your children. As they become adults, debt will be unavoidable (cars, homes, college for their own children, etc.), but your financial standing during retirement shouldn’t be a worry of theirs. While setting aside money for your children's college education, continue to save for your future as well.
The Sooner the Saving Starts, the Better
Your first thought after bringing home your newborn children might not be to open up an account, but you don’t want to delay too long. Think of it this way: the sooner you start contributing to your savings, the more money you’ll be able to set aside. The secret behind a successful savings account is compound interest, whether it’s your retirement or your children’s college fund. If you begin saving what you can while your children are young, that money will have the potential for growth over the years. For example, it’s a good idea to open a college savings account when your children are young and regularly contribute to it as they age.
Consider Scholarships & Grants
Scholarships and grants are reserved endowments. Thanks to Pell Grants, Ford Grants, and merit aids, thousands of students attend colleges and universities each year in the United States. It’s not uncommon for parents to become discouraged because of the misconstrued idea that their children have to be geniuses to qualify for such awards – they don’t. Money is granted to students based on a number of different qualities. Additionally, eligibility for merit-based awards that provide tuition assistance are offered to students who apply for admission to schools where their grades put them in the top quarter of the incoming class.
Retirement Funds Shouldn’t Be Cashed Out
Cashing out retirement savings funds is one of the biggest mistakes parents can make. As mentioned before, sacrificing your financial future to put your children through school is not the solution. Overall, your fiscal health is damaged and your children are left with the pressure of covering your bills. When you cash out retirement savings, it depletes your funds that had years of compound growth and makes you subject to fees and other penalties accompanied by such action. Once their college education is completed, your children will have the ability to make more money. Your retirement is there for you when you are unable to bring in that income that you used to rely on.
Share Financial Responsibility
In the event your children do end up using loans to pay for some of their schooling, use it as a teaching tool. By giving your children the opportunity to learn lessons about financing and debt they will develop a healthy relationship with money and a respect for credit. You can help them gain an insight into credit repayment plans and show them firsthand the dangers of debt. Leading by example and implementing responsible fiscal habits early on will only pay off in the end. Then, when it’s time to send them out to world to make their own financial decisions, they’ll feel confident and prepared. Teaching your children early about how much money the life you have actually costs and a budget that goes along with that life will no doubt have a lasting positive effect on them.
Remember that your retirement is equally as important as your child’s future as you build financial foundations for happy lives down the road. Retirement and college savings go hand in hand, so each should be considered with the other in mind. Above all else, you want to enjoy your future with a healthy income and watch as your children flourish in their careers and their own families. Start saving now in order to reap the benefits of your contributions as you sit back and enjoy watching everything and everyone grow. For more information and help with financial planning, visit: https://www.manhattanridge.com/