If you don’t fund your retirement, you’re quietly making your kids your plan
It’s a luxury to have your parents pay for your school.
It’s also one of the easiest ways to get your kids to take their education for granted.
When a person pairs effort with a price tag….you just cherish it a bit more.
But more importantly, funding your kids’ college education before you fund your retirement goals is a sure way to not end up where you want to be financially.
It’s noble to foot the bill for your kids’ education and grant them the opportunity for a “better life”, but it can also set up parents to be financially dependent in the future.
Self Care > Care for Others
As they frequently mention during the airline safety measures, put on your mask before helping others put on theirs, so you don’t die while trying to save someone else — you both can live.
The same applies to your finances.
Whenever you prioritize caring for others, you jeopardize your financial health.
Your kids are more than capable of finding creative ways to fund their education, transportation needs, and other financial adult responsibilities.
Before you jeopardize your financial situation, pause and consider the long-term consequences of financially supporting your kids for something they can cover themselves.
Six Options Your Kids Can Maximize Before Coming To You
- Loans
- Scholarships
- Grants
- Work study programs
- Good Ol’ fashion jobs
- Entrepreneurship
Every single option you see above there (all six), I took advantage of…
- I got a full ride to college
- I also got multiple scholarships
- I applied for and received grants
- I took advantage of work study program
- I worked multiple regular jobs
- I also engaged in entrepreneurial efforts to pay for my school
- I even took out some loans to help cover the difference
There was no stone unturned.
And the lesson I learned from engaging in all of these options was work ethic, money management, and independence.
Don’t Take Out Loans For Your Kids Either
My parents took out a parent plus loan for me, that I prioritized paying back even before paying back the student loan in my name.
BTW — I advise parents NOT to take out loans for their kids’ education.
Here’s why:
- You don’t know when your child will pay off the loan.
- You don’t know how fiscally responsible they will be.
- You don’t know when they will prioritize the payoff.
- You don’t know what their financial situation will be post-graduation.
Worst case scenario your kids don’t pay back the loan at all, which means you’re left to foot the bill.
This happens. It’s not an out-of-this-world scenario.
Other Ways To Help Your Kids Succeed
Outside of education, there are plenty of ways to help your kids succeed in life:
- Time invested — teaching and sharing life lessons
- Exposure to new people, opportunities, and geographic locations
- Ensuring you are financially set up for success so your kids can mimic your habits to set themselves up
- Ensuring your kids experiencing work for others and or exploring entrepreneurship, so they understand the pros and cons of both
- Allow your kids to live at home during college, or help with providing food money when needed.
But I Don’t Want Them To Go Into Debt
See what they can do on their own before helping your kids out financially.
Put them to work early and encourage them to apply for programs or pay their way through school.
Eliminate financial dependency on YOU, so you can continue to build wealth for your future.
Going into debt is not the end of the world.
When someone implements discipline, they’re able to escape debt sooner than they know it.
What If I’m Already Set for Retirement?
If you got it like that, and you’re adamant about paying for your kids education, set requirements.
Such as:
- You pay off your kids education once they graduate
- You pay off their schooling after they’ve lived on their own and paid down a certain portion of the loans.
- Your kids are consistently investing and managing their money wisely
There are deep lessons you can’t teach kids if you spoon feed them everything.
When you set requirements and boundaries, you may notice your kids actually perform better in life.
Helping your kids with everything, can oftentimes end up hurting them; it stifles their financial independence and ability to think and come up with ideas that can accelerate them forward. It can also create a nasty pattern of long-term dependence well after reaching adulthood.
What If My Kids Don’t Go To College?
You still have the opportunity to teach them financial independence by teaching them how to fish on their own.
Allowing your kids to struggle and figure it out can be a great teacher for many.
—
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.