Every parent wants what’s best for their child, and helping them pay for college is a step many parents choose to take. You too may want to help your child achieve their dreams, but it’s important to remember that this shouldn’t be at the expense of your own future.
A shocking 64% of Americans have not saved enough for retirement and only 39% of Americans say they are very confident they will be able to retire comfortably. Having a clear plan for your financial future will help you achieve both peace of mind for yourself and your child. To form a plan, we recommend you ask yourself the following eight questions, assess what you can save, and prioritize your goals.
You don’t have to choose between yourself and your child, and we want to help you have both the retirement you deserve and the ability to help your child achieve their dreams.
Step 1: It may seem like a daunting challenge to determine how much money you should be saving for your child’s college and your own retirement but having a plan in place will help you gain both the confidence and peace of mind to tackle that challenge head-on. The infographic below has some questions you should discuss as a family. Knowing your answers to these questions will help you begin to get a better understanding of what the financial needs are for each of your goals.
Step 2: Once you’ve answered these questions, the next step is to assess what you can realistically set aside each month for your retirement and your child’s college fund. One way to this that we suggest is by preparing a detailed budget for monthly income and expenses. Try to be as accurate as possible and keep in mind that it will likely change over time. When these changes do happen, be prepared to reevaluate your budget, as you may be able to save more or less in changed circumstances.
Step 3: Once you’ve decided on the amount you’re able to put away each month, we recommend you decide for yourself how much of that you’d like to put towards each of your goals, as well as how you’d like to invest it. During this step, you may find that you have to prioritize one goal over the other in the short- or long-term. If you have limited funds, funding your retirement should take precedence over assisting your child with their education. It’s important to remember that if you wait to set aside funds for your retirement until your child has graduated, you’ll be missing out on years of potential growth and compounding of your money. We recommend you save for both at the same time, with priority on your own long-term retirement plan.
While going through these steps, you may find that you’re unsure about how to best allocate your funds or prioritize your goals. A professional financial planner may be able to help you design a plan and investments that best cater to your family and goals.
At Wealth to Women, we focus on helping women and their families feel empowered, grow their wealth, and gain financial freedom. If you have any questions or seek professional assistance in achieving your own goals, we would be honored to serve you. We offer a free consultation to anyone interested in potentially working with us. To make an appointment for your free consultation, please call 716-568-8568.
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