College vs. Your Retirement: Put the Oxygen Mask on Yourself First

When you become a parent, you sign up for decades of decisions that demand answers—even before your first child is born! Will both parents work outside the home? When will you start potty training? Where will your child go to school? When can they date? What is their curfew? And with every choice you make, you agonize about whether you made the right decision. It’s exhausting.

No decision brings more weight and worry than whether to pay for your kids’ college.

You’ve heard the horror stories of entitled kids who think the world owes them. You don’t want your kids to develop that attitude. On the other hand, you don’t want them shackled by student loans. And you certainly don’t want your children living in your basement when they’re 30. You want them to be on solid financial footing. What should you do?

Is Paying for My Kids’ College an Obligation?

Listen up, everyone: Footing the bill for your kids’ education is not an obligation. Don’t let any pressure from neighbors, coworkers, TV shows or online ads make you feel guilty because you’re not willing to pay for Junior to go to a private college on the coast to study maritime history. Yes, education is critical. Today’s job market proves that. However, the goal isn’t just a piece of paper. You want your children to become productive and responsible adults—paying for college doesn’t guarantee either of those outcomes.

With the social pressure off your back, you’re free to decide whether paying for your kids’ college is the right move. Before you do, though, you need to think through some factors. Just because there’s money in the bank doesn’t mean you need to use it to pay for school.

Why Do I Want to Pay for My Kids’ College?

Before you write that tuition check, think through why you want to pay for your kids’ college. Maybe you know the power of education and want to give that gift to your kids. Maybe you feel pressured to do what other parents are doing. Maybe you want to give your kids a better start than you had. Or maybe your oldest child wants to carry on the family business. Motive matters—especially when it comes to paying for college. Do a gut check to make sure your intentions are good.

What Does My Spouse Think About Our Kids’ College Fund?

If you’re married, talk with your spouse and come to an agreement about what you will (or won’t) provide for your kids’ college. You come from two different backgrounds with different experiences that shape your opinions about paying for your children’s college needs. Just like you work on the monthly budget as a team, you need to be on the same page when deciding on how much you’ll help your kids through the collegiate years.

Can I Pay for College Without Jeopardizing My Future?

This is the most important factor to consider once you’re on the same page with your spouse. Can you afford to help your kids or are you struggling to pay the bills? Will helping your child make your financial situation worse? Will it affect your retirement picture? If the answer is yes—which it probably is since withdrawing from 401(k)s and IRAs can come with penalties or can negatively affect your financial aid package—then it’s time to look for alternatives

Market chaos, inflation, your future—work with a pro to navigate this stuff.

Don’t ever sacrifice your retirement savings so your kids can go to college. There’s no guarantee they will graduate from college, but we can pretty much guarantee that you’ll retire—and likely sooner than you think. Your children can apply for scholarships and grants for college, but you can’t do the same for your retirement years. You need to take care of your own financial needs first and then help your kids. It’s like the airline directive—put the oxygen mask on yourself and then on your kids. Otherwise, you’ll be living with one of them later on.

Is College the Best Option for My Child?

In all honesty, some people aren’t cut out for the university system and what it requires academically or socially. That’s not a bad thing. It just means your budding adult may forge a different path that doesn’t take them through the halls of an Ivy League school. The military is a great career choice for some people. Others thrive by going to a hands-on trade school to develop a specialized skill. Your kids need to pursue a career that works for them—not what you dream about. There’s no sense in forking over money for education that isn’t suited to your kids’ gifts and interests.

Is It the Right Time for My Child to Go to College?

Not every graduating high school senior needs to go straight to college in the fall like it happens in the movies. A year or two in the working world can give your adult child the time to decide what they want to study. It can also teach them responsibility and accountability, two traits that are critical for success in college. And they’ll learn the value of money after working hard for it. You know your kids, so ask yourself the question: What would be best for this child right now? Then talk to them about it and make a plan together.

Worth noting: Some of the heftier scholarships out there are only on the table for a limited time after high school graduation. If you’re counting on those, make sure you know the shelf life and take that into consideration as you’re planning.

How Much Am I Willing to Pay for My Kids’ College?

Now, before you say you’re willing to pay for everything, consider this: Some studies show that the more money you shell out for Junior’s college degree, the lower grades he will get.¹ It sounds backward, doesn’t it? But the numbers don’t lie. The students who do the worst academically are those whose parents paid the bill without requiring any accountability or responsibility. That’s a recipe for disaster—and a warning letter from the academic dean.

Your children will take college more seriously if they have some skin in the game. Before you give them any money for school, sit down together and talk about your expectations. Will you ask them to pay half the cost? Will you require them to maintain a certain GPA? Will you set a limit on the number of years you will pay tuition? Will you pay tuition only if Junior goes to community college for the first two years? Questions like these need answers—and those answers need to be communicated clearly before you make a single college visit.

If I Can’t Pay for College, How Can I Help My Child?

There’s more than one way to support your kids as they get ready for college. You may not be able to pay for your kids’ education, but staying involved in the college application and selection process is just as important. And pro tip: Work with your child to fill out the FAFSA (Free Application for Federal Student Aid) paperwork, since most colleges and charitable groups use this information to decide who gets scholarships and grants—and how much they’ll get.

Another tip: Get your kids involved in the strategy. Bestselling author Anthony ONeal’s book Debt-Free Degree teaches parents how to help their kid pay for college without debt, even if you haven’t saved for it. It lobs how-to-pay-for-college nuggets across the plate so even your most reluctant readers can take it in a little at a time and start owning their college funding plan.

Finally, keep in mind, no matter what career path they choose, or how many times they change their mind, your kids will benefit from the wisdom and support you give them. And your unconditional love is more valuable than any college degree they could ever get.

Need Help Planning for College and Retirement?

If you’re banging your head on your desk right now trying to force all the college planning chaos into some kind of order, we officially call that “’bout to lose it.” Don’t lose it—not your money and (pretty please) not your sanity. Take control today and find an investing pro who can help.

A qualified investment professional like those in our SmartVestor program can help you make sure you take care of both college and retirement and walk you through your options.

Find a SmartVestor Pro in your area!

This article provides general guidelines about investing topics. Your situation may be unique. To discuss a plan for your situation, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros.