Monday, June 23, 2014

Saving the Moola: Investing in Your Child's Future

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I feel like I can finally address this issue now that I'm a parent! And while my general stance on saving for your child's future hasn't changed, I can tell you that I absolutely understand the emotion of wanting to provide for your child.

With that said, please consider this: if you provide for your child instead of providing for yourself first, your child will feel obligated to provide for you later. 

My retirement goal? Not to have to eat dog food. Laugh all you want, but I know eating dog food is a reality for some elderly. Jason and I want to be sure we have the funds we need now and later to care for ourselves without burdening our Bug.

This may mean Bug won't have a hefty college fund. Our Bug might have to work her way through college - just like we did. She may need to work hard enough at her studies to earn a scholarship - just like we did.

I would say, "And look at we turned out!" But I do dislike when people say that.

So instead I'll say this: working hard for what you want is never a bad thing. Working hard for what you want often serves as inspiration. If you work hard to pay for college, I'm pretty sure you'll show up to class. And if you're working hard to pay for those classes, I'm pretty sure you'll actually care what's being taught. And if you actually care what's being taught, I'm pretty sure you'll study, earn good grades and graduate with an incredible GPA. That will in turn help you serve in the career field you've chosen.

Not that I'm speaking from experience or anything. I despised school, yet obtained my bachelor of science degree. I didn't have a college fund, yet I had minimal student loans, all of which are now completely paid off before I hit my 30th birthday despite the fact we make an incredibly modest living.

There is a time and a place to save for your child's future. Here's what Jason and I have decided: right now, we're focusing on saving money. Our goal is about an 8-month emergency fund. I imagine this will take us quite a while, so I'm not too concerned about what comes after that.

But once our emergency fund is fully funded, we plan to save for our retirement next. About 15% of our income will be set aside in a mutual fund. If there is money left over after that, we will start putting money in Bug's account.

With all of that said, Bug does currently have a college account. She has accrued several hundred dollars from birth gifts, baptism gifts, Christmas gifts and birthday gifts. All of the money she has currently received from these occasions has been set aside for her to use for college (or if she chooses to be a stay-at-home wife and mama, then she can take this money with her then).

If I could, I would provide the world for our Bug. I know Jason feels the same way. When we look at her, we truly see the future. But first and foremost, I want Bug to worry about us as little as possible. I want her to know that we provided for ourselves first so she could be free to live her life later. 

And let's face it, dog food is really not at all appetizing.

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