You’re cruising along at 35,000 feet when the cabin suddenly loses pressure. Yellow oxygen masks deploy from the ceiling, begging to be used. You start reaching for the lifeline but your child sitting next to you screams for help. What’s your next move?
If you follow the preflight safety instructions, you put on your own mask before assisting others, no questions asked. After all, it’s difficult to help others if you don’t help yourself first. This seems straightforward when we’re flying through the sky, but a recent report from T. Rowe Price reveals that it becomes cloudy when we’re on the ground, handling money, as an alarming number of parents are putting their own retirements at risk in order to fund their children’s college expenses.
Nine out of 10 parents believe their children will attend college, and since college typically arrives before retirement, the majority of parents feel like they should put money toward that first and save for retirement after. In fact, 49% of parents are willing to delay their own retirements to pay for their children’s education, while 74% feel guilty they won’t be able to provide more financial assistance. Overall, 63% are concerned about their children having enough financial resources to attend college, the most commonly cited concern besides health care costs.
Naturally, parents want to take care of their children first, but past experiences may be hindering the financial decision-making process. The report finds that 63% of parents believe they took on too much student debt themselves, and 79% want their children to worry less about money while in college than they did. Just over half of the 2,000 American parents in the study say they would take on at least $25,000 in debt to fund their children’s education, with 9% saying “whatever it takes.” Yet 66% of parents are still paying down their own student loans.
Finding a balance with your money is a crucial part of personal finance. Saving for retirement does not have to be mutually exclusive from saving for college.