If you're like most families and have limited financial resources, should you put your savings toward your child's college education or toward your own retirement? To find answers, Jean calls on Jolie Solomon, senior features editor at More magazine, who edited a piece in the May 2007 issue titled "Put the Kids Second." Although it can be nerve-racking to make that choice, Jolie says while you can borrow money for college, you're on your own when it comes to retirement. Jean talks to Jolie about why parents should consider saving for retirement before saving for their children's college costs:
Parents have to think of college and retirement as two competing needs for their money, Jolie says. "You can't think about one without the other," she says.
Saving for college is optional, Jolie says, but saving for retirement is not. "There is no such thing as a college loan for retirement. … You can borrow for college—your kid can borrow for college—and they have a whole life to pay it off," she says.
Talk to your kids early on so they know what their responsibilities are, Jolie says. No one likes surprises.
If you've already promised your child a college education, Jolie says to revisit the conversation. Explain the things they can do to help out, including earning scholarship-worthy grades or going to a state school instead of a private one. Also, Jolie says that young adults would probably prefer to finance their college education themselves rather than having to support you during your retirement.
People value things more when they pay for them, Jolie says—so you're actually doing your children a favor by giving them the responsibility of paying for college. "You are teaching them responsibility and the value of that education and a dollar," she says.
If you still can't wrap your mind around it or feel too guilty not paying for college, Jolie says to save for retirement while your children are young. Then, when they reach college age, put the brakes on for a bit and start giving them some money.