Sometimes, parenthood can feel like nothing less than an endless rollercoaster of emotions. After all, kids have the unique ability to fill you with joy and pride one day and leave you feeling downright baffled the next.
But as many parents can attest, preparing to send your kids to college can summon up a whole new set of unexpected emotions. On one level, every parent wants to give their kids a chance at a great future. On the other, college is insanely expensive.
But make no mistake – finding the line between helping your kids with tuition and tanking your own financial future is vital. Luckily, we recently got some great advice on the subject from Dorethia Kelly, award-winning financial expert, coach, and author of the book #MoneyChat.
A mother of two girls herself, Dorethia is here to explain why you should highly reconsider paying for your kid’s college if it means risking your own financial future.
Put On Your Own Oxygen Mask (Before You Pay For Your Kid’s College)
You know how airlines always tell you not to help your kids put on their oxygen masks until you’ve secured your own? As you may have guessed, this precaution isn’t about throwing your seven-year-old under the bus to save yourself.
It’s about making sure you remain conscious long enough to help them and anyone else who might need your assistance. As Dorethia explains, the same advice applies to finances.
It’s one thing to tuck aside some money in a 529 or UTMA. But Dorethia cringes as she recalls parents who have gone as far as emptying their 401k’s to cover their kids’ college tuition.
Initially, emptying your savings or 401k may feel like a selfless act of paternal love now. But things are going to look a lot different the next time you experience a financial emergency. Unfortunately, that’s when many misguided parents realize they’ve put themselves in a position to help exactly no one.
Ensuring Your Own Financial Stability
In the long run, ensuring your own financial future is as much for your child’s benefit as your own. After all, there’s nothing worse than having to turn to your grown children for help with medical bills or living expenses.
Not to mention that it may not always be feasible for them to help, especially if they’re trying to support a family of their own. “We just have to be realistic about, as we get older, what our kids are going to be able to do for us financially,” Dorethia explains.
That’s why she advises covering several financial bases before you even think about investing in your child’s college education.
Get Honest About Money
Dorethia recommends starting by getting honest about your present financial situation. “What do you need to do as a parent to get yourself on good financial ground right now?” she asks.
This is where you’ll want to take a good look at your debts and living expenses so that you can start to chart a roadmap to your financial future. By getting honest about the full picture, you’ll find yourself in a much better situation to determine whether helping your kids with college is a responsible financial move. Try to create a budget that will allow you to pay off your debt, pay your bills, and still have a little money left over at the end of each month.
Build an Emergency Fund
Dorethia confirms what we’ve all long expected-– not everyone sobbing in the dentist’s office is suffering from a toothache. She admits to once bursting into tears over the huge dental bill she knew was waiting at reception alongside her complimentary toothbrush.
Many of us can relate to learning the importance of an emergency fund the hard way. “You can call it an emergency fund, opportunity fund, whatever it is, just fund it,” Dorethia advises.
Since getting her fund up and running, Dorethia is happy to report enjoying a tear-free existence. Knowing that you can handle whatever comes your way is a perk of financial freedom she encourages every parent to experience.
Decide How to Grow Your Money
Another key consideration to keep in mind is that what you do today will determine your financial success down the line. Whether it’s a 401k, an IRA, or any other type of investment, now is your time to secure your money for the future.
“Make sure that you are setting yourself up to have relief and financial freedom versus every month just trying to figure things out,” Dorethia emphasizes. Don’t get so focused on your child’s education that you forget to set yourself up for a self-sufficient retirement.
A Better Way to Pay For Your Kid’s College
Okay, so you’ve secured your own oxygen mask. Now it’s time to address that nagging guilt over how best to pay for your kid’s college. The truth is, there are not only other options but plenty of better options.
If there’s one thing you should never feel guilty about, it’s hounding your kids about the importance of scholarships. “There’s money out there for your student,” Dorethia assures parents, before revealing a far more common problem.
Too often, she explains, students don’t get scholarships simply because they don’t apply for them. That’s why Dorethia had her own girls make out spreadsheets to keep track of scholarship applications as they approached graduation.
“It’s like a part-time job for you and your student,” she admits, “I am not gonna kid you about this.” But when you’re successful, the hourly wage definitely beats working weekends at Pizza Hut all the way through school.
What if your child refuses to put in the work? As Dorethia points out, “If your child isn’t willing to do that, which is writing essays and submitting them, why would you deplete your life savings for them to go to college?”
Community Colleges and Vocational Schools
If your child has put in the work but is still coming up short of tuition for a four-year college, then don’t be afraid to look into other options. Starting off at a community college or opting for vocational school can be incredibly smart moves. As Dorethia explains, “The goal is to go to college as cheaply as possible.”
If your child hopes to transfer to a four-year college after getting their associate’s degree, just make sure you investigate which classes will count as transfers. But vocational schools may also be excellent options.
As Dorethia points out, “There’s a shortage of blue-collar labor that pays six figures.” Not only do many vocational schools offer a far less expensive education, but an opportunity to graduate in half the time.
While navigating college costs is never easy, resist the urge to make a drastic financial decision that could affect your entire family for years to come. “Take a step back,” Dorethia advises, “Look at your future in 20 years.”
Imagine how you’d feel if you found yourself with an empty 401k, even if your college-bound child never made it to graduation. In reality, a great deal of support and guidance can often go a lot further in helping your child graduate debt-free than ill-advised financial support.
To dive into the topic of generational wealth and happiness in more detail, check out my free video resource on the system I’m using to Make My Kid a Millionaire.