If you don’t have goals, you’re less likely to save, budget and plan for the future.
But what happens when you have multiple financial goals and struggle to work toward all of them? It’s a situation many Americans find themselves in today. The situation can be even more challenging for parents, who want to save for the rising costs of their children’s education, but also need to prepare financially for their own retirement.
“In a perfect world, you would have the income and cash flow to invest for retirement and also establish college funds for your children,” said Mike Moyer, CFP®, senior wealth strategist at PNC Wealth Management® and a father of four boys. “However, the reality is that most people aren’t able to fund 100 percent of both goals and still stay afloat.”
So what should someone in that situation do? Moyer said it’s not an uncommon scenario. He recommends that if you can only work toward one goal, put your retirement first.
“Your children can take out loans for college, but you can’t take out loans to pay for retirement,” Moyer said.
How to Invest For Retirement First
Moyer recommended you start by taking advantage of an employer-sponsored 401(k) plan if you have one, especially if it has a match. He also suggested contributing to a Roth IRA and any other tax-deferred retirement plans you are eligible to fund.
“You are in charge of making sure you can live the lifestyle you want in retirement, and that includes budgeting for rising health care costs,” Moyer commented. “Sometimes the best gift you can give your children is ensuring they will not have to financially support you in your retirement years.”
Moyer said no matter what stage of retirement planning you’re in, it’s important to work with a financial advisor.
How to Fund Retirement and Education Expenses
Let’s say you’re comfortable with how much you’re putting away for retirement, but you aren’t able to allocate as much money as you’d like toward a college account for your children. Does that mean it’s not even worth the effort?
Absolutely not, Moyer said. In fact, every little bit will help. He suggested people start by conducting a simple cash-flow analysis to see where you’re spending your money.
“Often, when you look at your expenses, you’ll realize you’re spending too much on unnecessary discretionary items,” he said. “Once you realize that, you can reallocate some of your money to education.”
One vehicle that parents may want to use to save for college is a 529 plan, which offers federal tax advantages and may also offer state tax advantages, depending on which state you live in.
It’s most advantageous to start saving for college before your child turns five. Even if you can only save a little bit, time and compound interest will work in your favor.
“As a parent myself, imagining a scenario where all of my children attend expensive private schools with no financial aid is a scary prospect,” Moyer added. “However, you can only save as much as your budget allows, and it’s okay if your college savings come up short.”

Alternative Sources to Fund Education
Moyer advised that parents shouldn’t feel like the cost of their child’s education is entirely on their shoulders, adding that there are alternative solutions to pay for college.
“Most families fund college through a mix of education savings, cash flow from current income, financial aid and student loans,” he noted.
Consider asking grandparents and other family members to contribute to college funds instead of buying the child gifts for birthdays or holidays.
“It’s the gift that will keep giving,” he said. “Education unlocks a world of opportunity.”
Moyer added you can cut costs if your child starts at community college and then transfers to a four-year university. He also suggested high school students take advantage of Advanced Placement coursework so they can enter college with credits already under their belts.
“Work with your child to understand the importance – and financial benefits – of finishing in four years or fewer,” he noted.
For children who plan to attend a private university, look at all financial aid options.
At the end of the day, if your child has to take out loans, it’s not the end of the world. It will help them establish their credit history and teach them the importance of budgeting for loan payments.
“It helps your child prepare for the practical realities of life,” Moyer said. “Ultimately, the purpose of going to school is to get a job so they can pay their bills. Your children will have many years to pay back education loans, but you only have a limited number of years to prepare for your retirement. However, you and your child should have an honest conversation about how much education debt they can and should take on.”
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