Should You Prioritize Your Children’s Education Over Your Retirement When Planning?
If my children are going to university to do an ordinary course, I’d rather they go to USIU or Strathmore, but if one comes with an admission to Juliard to study music, then I definitely want to be able to pay for it
This was my friend Job at breakfast the other day. We were discussing my plans for my daughter’s university education and his plans for his future kids.
I am certain many parents with young children have agonized about this: What should take priority between our retirement, and our children’s education, in view of present financial responsibilities? We are at an age where kindergarten costs more than what our parents paid for our entire education, university will be times more.
What about retirement? We cannot hope that our children will support us, we are barely making enough to support ourselves, leave alone our parents. Children are not a retirement plan. While we have looked at retirement extensively on this blog, we have not compared it to other long term priorities.
Many of us are especially sensitive to our children’s education, because we at some point had to scale down our big education dreams to go with what our parents could afford. We want to avoid the same for our children and so we take up education insurance schemes and hope that they will be sufficient, or we embark on other investment plans that are education focused.
Retirement however takes precedence, if you are thinking of financial security into the future.
Why is this? Because if you have personal financial concerns in your old age, they will not only affect you, but also your children. By the time your children are going to university, your productivity will be going down, affecting your ability to fund your lifestyle and educate them. You will not pay for Harvard if you are barely making rent. Also, even if they opt not to go to university, they still will need your support.
Remember that your children can get loans for school, but you can’t get loans for retirement. Figure out a game plan and use a retirement calculator to determine if you’re on track with where you want to be. Once you have that back up plan on course (key word in retirement saving is automation), then tackle education.
If your retirement is covered, what are the options to save for your children’s education? In the next posts we look at the various options, starting with savings accounts, education insurance and more! Have you joined our #52WeekChallenge? my goal is to use the fund to kick-start saving for my daughter’s college. You can save for anything, join us!
