Let’s Get Serious About Money
As our teens graduate from high school and move on with their lives, we have to get serious about money, both for them and for ourselves. I watched a TD Jakes show in horror, in which the mom had secretly borrowed money in her daughter’s name and the daughter was saddled with over $150,000 in student loan debt. How could that happen? Was there any thought about what happens once the child graduates from college? Does your child really have to go to an Ivy League school or the college of her dreams, if you can’t afford it? And what about you? Have you thought of your life after the children have left home? Are you ready for the retirement that will inevitably come?
1. Live in your truth
Parents have to be honest with themselves, and with their teens. Is it really necessary to keep up with the “Joneses”, to the detriment of our families? Hopefully even before now, you’ve talked to your teens about applying for scholarships. There are numerous websites and apps for applying for scholarships. Examples are Marianne Ragin’s scholarshipworkshop.com or the Scholly app for finding scholarships. Most colleges also have scholarship programs and stipends teens can apply for. Hopefully, you set up education funds for your children, if they are going off to college. Generally, cashing out your retirement or savings to pay for college tuition is not a great idea. Your kids can borrow money if necessary to fund their college education but you can’t borrow money to fund your retirement. If your teens take out loans, make sure they realize it is not free money and it has to be paid back. They have to learn to live within their means. For those who get income based tuition money they must be taught the responsibility which this comes with. I have known some students go to school on a free ride and literally drink their way to losing the money. We have to teach our teens responsibility and gratitude no matter how the family is paying for college. even if they receive scholarship money.
2. What about you?
What about you? Have you thought of your life when your children finally leave home, whether for college or to work? Have you planned for your day to day life? Most parents dream of being free to travel and having fun once their children leave home but can you actually afford to do that? If your child is going to school out of state did you factor in travel expenses for your child and most likely for you? According to a 2016 GOBanking Rates survey, 69 % of Americans have less than $1,000 dollars in their savings. Perhaps rather than traveling and living large on your monthly paycheck, this is the time to get serious and start saving regularly. Start putting aside a small amount of money into your rainy day fund. It is better if it is automated with each paycheck so you never even see the money. It is never too late to start. The thing is to start now, putting aside something, no matter how small the amount of money is. Also think of your life insurance. Do you have enough life insurance for your family should the unexpected happen. If you have a term policy, make sure it is still active and the term has not expired. It really is time to refocus on yourself and start getting your financial life in order if you haven’t done so already.
3. Are you ready for retirement
Retirement does not have to be a scary proposition if you are ready for it. If you have never thought of what happens after you retire, now may be a good time to take a hard look at your finances. It is often very scary to look at the true picture but it’s better to do something about it now. Most employers have a 401 k plan or some other retirement vehicle you can contribute towards your retirement in. Take advantage of this. It automatically takes the money out of your paycheck and also saves you some taxes. Then be realistic about when you want to retire or even if you can retire. Maybe you may have to switch jobs to ensure some sort of income coming in. Enlist the help of a reputable financial advisor, or your CPA to help you decide what you can do now to ensure a pain and panic free retirement. I won’t even pretend to know all there is to know about retirement savings but I think it is just common sense to realize it is inevitably coming and to prepare for it.
As our kids graduate and go on to college or join the workforce, let’s get serious about money. Don’t get swept into the allure of “the best school” for your child or the glamor of the latest gadgets. Be realistic with your teen and with yourself. What can you afford? How can you help your teen get the best education without sacrificing your future? Don’t take out your retirement to pay for tuition. You may think your teen will help you out in the future but do you really want to place such a burden on your child, when they will have their own responsibilities and their own lives to lead? Take time to talk to a trusted advisor about your future. Save and invest wisely and be smart and plan for your retirement. It is coming, really, whether you are prepared for it or not.
“You must gain control of your money or the lack of it will forever control you.” ~ Dave Ramsey