Wednesday, February 6, 2008

Kids' college or retirement? Retirement!

I'm sure I probably just lost a few readers with that one, but let me plead my case, please. A hot topic with any parent, is their kid's future, and I won't argue with that. As a new dad, I want only the best for my son, and any future children I'll have...but paying for my kid's college education is not one of them.

Before I lose anymore readers, and before someone reports me for being a bad parent, let me say I believe education and learning is vital to success. I went to college, and i paid my own folks wanted to help out, but couldn't. I saved, and took out student loans. I worked three jobs. I drank pallet loads of Mountain Dew to stay awake. And while the experience was great, funny thing is, like most college grads, I'm not working in the field I got my degree in. Personally, I think a lot of employers just look at the fact that you graduated college, as opposed to what field you studied (unless it's a technical field, like engineering, medicine, etc). But, I'm heading down a rabbit trail, so back on topic.

Lately, in the news, there has been quite a few stories on grads moving back in with mom and dad (not a good idea). Probably kind of tough on everyone involved. But as a parent think about would you feel about having to go to your kids when you retire, and say, "Hey, I need to move in, and have you support me...because I spent my money on your college education, instead of planning for my retirement!"

What do you think is going to be the outcome of that situation? Not a good one, I would wager. This is why when it comes to your retirement, or your kids' college education, you need to be selfish, and lookout for yourself. Your kids have a lot more time ahead of you to get financially stable. If they are young enough, teach them how to properly manage money and make it work for them...they can have a nice college fund of their own to start out with, by the time they reach college age. Teach them to save a portion of their allowances, money gifts, and wages as they get older, and they'll be fine.

Keep in mind, college tuition assistance will always be available, through programs like grants, scholarships, and low-cost loans (last choice). On the retirement end though, unless you plan for it, it won't be there, and if you believe Social Security will be there for you, I have some waterfront property to sell you in Arizona...
Seriously though, Social Security won't be there, and even if by some chance it is, it won't be enough to cover your living costs. And if your kids are following your example, and they are trying to save for THEIR kids' college funds, they probably aren't planning for their own retirement, and they sure as heck can't afford to pay to support you.

So, to recap, take care of yourself first! Make sure YOU have savings and investments for retirement, so you can live after you retire...without asking your kids if you can move into their basement!


Mommie said...

I was pretty much the same way. I worked 2 jobs through undergrad and paid all of my grad school. I worked hard for my education and I want my children to do the same. If I win the lottery, their tickets are paid to Harvard, first and foremost. But until then I think I'd like to NOT live with my kids!

Steve said...

Totally agree...the education (like most things) is more appreciated if worked for...and worked HARD for. Being given something just doesn't cause the same sense of satisfaction. That said, if someone is financially in a position (debt free, 6-9 month emergency fund, well funded retirement, etc) to contribute, I see nothing wrong with say secretly investing/saving the money for their child, and make their kids pay their own way through school...then give them a nice graduation present after they get their degree. The kids will have learned some great lessons on hard work, prioritizing, budgeting, etc, and will appreciate their accomplishments that much more...and you get to feel good about helping your kids out, without setting them (or yourself) up for bad financial habits.