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  • Archive for September, 2012

    Parents, it is Time to Just Say No!

    Thursday, September 20th, 2012

    As a parent, you try to teach your children good money management skills. You teach them how to save and how to spend responsibly. But while you’re busy teaching them how to respect their own money, don’t forget to teach them to respect your money too.

    Many parents can get themselves into bad financial situations by spending too much money on their children, especially once their children are adults. Things like college tuition and weddings are expensive, and while every parent wants to help their children out financially, it is important to not do so to the detriment of your own retirement funds.

    Time’s Moneyland recently put out a list of “6 Myths About Saving for Retirement.” They ranked the belief that it is important to prioritize your child’s college tuition over your own retirement as the second biggest myth of all. Moneyland pointed out that while it isn’t the perfect solution, your kids can borrow to go to college and they have a lifetime to pay that money back. You don’t have a lifetime to save for retirement, so you need to put your retirement first.

    Another big expense that many parents face is their child’s wedding. But remember, while it is nice to be able to help your child cover some wedding costs, it is not your responsibility to do so. Jeopardizing your own secure retirement for your child’s wedding is not good for you or for your child in the long run. When the time comes, your kids will be thankful that you saved enough for retirement and that they don’t have to dip into their savings to take care of you.

    But the bigger issue here, bigger than your ability to say “no” and put your retirement first, is teaching your kids to not put you in a situation where you feel badly for doing so. Talk to your kids, explain to them how much you have saved and how much you still need to save. Explain to them that while the money may be technically there, such as in an IRA account or in the stock market, that does not mean that you have extra funds lying around that can be spent at any time. This money is earmarked for a certain place and time and your children need to understand this and respect it. Teach your kids to be respectful of your money and to not ask for unnecessary financial help from you. If you explain to them why it is important for you and for them that you save enough money for retirement, hopefully you won’t be put in the position of having to defend yourself when you find yourself having to say “No.”

    Finally, let go of the guilt. Taking care of yourself financially is not selfish. It is an important way of saying that you love your children and you are doing all you can to prevent yourself from becoming a financial burden down the road.

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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