Should I Save for my Child’s Education or my Retirement?

Photo by Andre Hunter on Unsplash

Financial decisions are a messy meeting of emotions & limited resources. It can be difficult to know what the “right” thing to do with your money is, particularly when your kids are concerned. One of the classic dilemmas’ parents face is if they should prioritize saving for their child’s education over their own retirement.

As a parent, it’s a natural instinct to put your child’s needs before your own. And make no mistake about it, financing a 4-year college degree has never been more difficult.

College Tuition Has Skyrocketed

  • In 1988, the annual tuition for a 4-year public institution was $3,190.
  • In 2018, the annual tuition for a 4-year public institution was $9,970.

That is a 212% increase.

  • In 1988, the annual tuition for a 4-year private institution was $15,160.
  • In 2018, the annual tuition for a 4-year private institution was $34,740.

That is a 129% increase.

And yes, these numbers are adjusted for inflation.

So has Student Loan Debt

  • 7 out of 10 college students graduate with student loan debt
  • The average student loan balance is more than $37,000
  • Total student debt is more than $1.5 Trillion
  • The delinquency rate (meaning 90 days late on payments) is at 11%

Starting your career with $37,000 or more in student debt is like carrying around a mini mortgage.

As a parent, it is completely understandable why you would want to do everything you can to spare your child from carrying around that much debt. Having graduated with $50,000 in student loan debt myself, I can tell you it’s no picnic.

There is no question, that helping your child avoid student loan debt is one of the greatest gifts you can give them. However, you shouldn’t prioritize saving for your child’s education until you have a handle on your retirement savings.

Put on your own Oxygen mask First

When flight attendants are reviewing the safety producers before takeoff, they advise you that in the event of a change in cabin pressure you should put on your own oxygen mask before you assist anyone else with theirs. That includes your own child.

Why would they advise you to do this? Is it because you should value your own life over your child’s? No. In fact, it is quite the opposite. If you pass out before you can get your oxygen mask on you are no use to anybody. If you are unconscious, who will help your child put their oxygen mask on or assist them in any other way during the emergency?

You should put on your own oxygen mask first because it’s the responsible thing to do.

Your finances are no different. Before you assist anyone else with their financial difficulties you need to ensure you are on top of your own finances.

If you prioritize saving for your child’s education over funding your retirement you may succeed in helping them avoid a large student loan debt.

But stop and think what other burden’s you might be placing on your children. If you have nothing saved for retirement, there are two possibilities when you reach your golden years.

1. You end up working until you die (or close to it)

2. You are unable to support yourself financially

You might think that sacrificing your retirement to give your child a leg-up in life is the right thing to do. You might also think you’ll be okay with working well into your 70’s or 80’s (which is easy to say in your 30’s or 40’s).

Your best-case scenario is working until you drop. Your worst-case scenario is being unable to work due to medical or other reasons and as a result, are unable to finically support yourself.

If that’s the case, who do you think it will fall upon to pay your bills? Your Children.

Having to support you for years or even decades, possibly during the time they plan to have children themselves, will be far more burdensome to your children than taking out a loan to pay for college.

So, put on your oxygen mask first. It’s the responsible thing to do.


This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.