If you’ve experienced the burden of student debt, you’re in good company. There are more than 44 million Americans in the same boat, and student debt in the United States has swelled to $1.7 trillion dollars.1
How do you help your child avoid the burden of student debt? How do you do it while you pay the bills? Save for your retirement? Pay off your own student loans?
The most important thing to recognize is that there’s no “one-size-fits-all” solution. Everyone has different expenses and priorities, and that’s okay.
Saving for College vs. Saving for Retirement
Trying to save for your child’s education at the expense of everything else may be unwise. First and foremost, work toward accumulating an emergency fund of at least a few months’ living expenses, because it’s always a good idea to be prepared for a rainy day. Then, consider your own retirement fund.
If you haven’t been contributing to a retirement plan, start today. Contributing early and often allows for compound interest to work its “magic” most effectively. And if your company offers a 401(k) match program, make sure you’re contributing at least enough to get the full company match. Otherwise you’re throwing away “free money.”
It may be tempting to put your child first and forego contributing to your retirement, but you can’t borrow for retirement, and you need to look out for yourself, too. The most prudent approach is to save for both as best you can.