Posted on February 13th, 2017
Marc Rittersporn/marc@integritt.com
The past few decades, we have more people than ever before going to college. We also have more student loan debt and fewer jobs at lower pay for college graduates. This has transcended into a problem for the baby boomers and other parents trying to move towards retirement. The best-laid plans Of Mice and Men often go awry: the practice of children with degrees paying their student loans with good jobs out on their own is disintegrating. Instead, older parents are paying for adult children’s expenses and student loans by dipping into their retirement savings and extending their plans to work longer. This backfires, as there are now even fewer new jobs for graduates. Furthermore, Millennials that have been trained to question everything are having a hard time putting the hours in and do not have a willingness to be poor after graduating.
Our children think a college education is a key to a great job, a decent living space, and a balanced life. The reality is a college education for most people is a necessity to a decent job, but that is not the starting point. The starting point is apartment sharing and peanut butter and jelly to eat the first few years. We just are not getting them ready for working from the ground up. Many parents want their kids to have the best, whether or not they (or rather, parents) can afford it. This leads to taking out more and larger student loans. Then the big day: they graduate, and then they move home. When they move back home, they need help with student loans; they raise your electric, water, and food bills; and they have no gas or spending money to go on job interviews.
The solution for the baby boomers and others soon to retire may be lifestyle changes and teaching their children about the reality of money, both of which involve planning and education now more than ever. Many young Americans are coming out of school and are saying they needed to learn more about personal finances: how to invest, do taxes, manage monthly bills, look for a job, and negotiate salaries. Many others may need a good dose of how to apply the word “no” to their lives. No, you do not have to go to the most expensive college; no, you do not need to spend an extra $40,000 on the “away from home” college experience. Then again, we can add the word yes in here as well. Yes, you can manage your classes and a part-time job to pay for your food expenses and clothes. The key to all the above is planning ahead.
Planning can show you and your children the down- side of college and life plans. Involve your children in creating and funding financial plans for all your important expenses. Then practice with them, showing your kids how to stick to plan and make an educated financial decision.
As always please contact me with any questions you may have. 772-266-2160.