How do airplane safety instructions also apply to your finances?
Everyone who has ever traveled by airplane has heard the pre-flight safety instructions. Those instructions tell us, among other things, that adults should secure their oxygen masks before helping a child secure their mask. Why? Because if the adult falls unconscious, they do little good to the child needing help.
Handling your financial responsibilities also requires that you help yourself first. As a parent, my instinct is usually to provide for my children before I worry about my own needs or wishes. Yet, if I focus on saving for my kid’s future education and neglect my own future savings, where would that leave my child? He has less college debt, but now may have the financial burden of helping his parents in their golden years.
So how can you balance saving for the future for all loved ones?
- Take advantage of your employer match. Saving as much “free money” as possible is a benefit that should not be ignored. The matching funds help multiply your retirement savings, thus giving you more freedom to save for higher education, too!
- Put savings where it can be accessed for retirement or education. Did you know that you could use a Roth IRA to fund some college expenses? This allows you to make the call later on how best to use the funds. Some life insurance products can accumulate cash that is available for college or retirement expenses as well. And don’t forget regular taxable brokerage account funds.
- Remember that lenders will lend for college. Loans, financial aid, and part-time work are just a few of the ways to pay for college costs. Do you think you could walk into a bank and ask for a retirement loan because you did not save enough (without getting laughed out of the bank)?
Give yourself permission to keep your own retirement savings on track before putting aside more funds for college. Staying off of your child’s payroll once in retirement can be the most loving and valuable gift you can give them!