There are some investments for my kids’ college. After Helena was born, and I was married, we had a chunk of money and plopped it in a 529 plan, a savings tool that gives you all kinds of great tax breaks. That move, by a stroke of great luck, happened in 2009, at the bottom of the market, and that investment has done quite nicely. Even so, every once in a while I’ll plop my family’s info into a college savings calculator — and more or less shut down mentally, emotionally and digestively. The sums required to pay for college for two kids is overwhelming. They are 5 and 7, and even though I know better, I choose to believe that is a very long time away.
I’m not alone in my bad college savings ways, and my friends at T. Rowe Price know this very well. The investment firm found that 52% of parents said it was more important to save for their kids’ college rather than their own retirement, and 53% agree with the statement, “I would rather dip into my retirement savings to pay for my kids’ college education than have them take on student loans.”
Check out the fun video with T. Rowe Price financial planner Stuart Ritter, who explains why this sort of thinking is flawed:
Stuart breaks down:
- Myths and realities of 529 plans (no, the government doesn’t snatch away any unused investments!)
- Harsh realities of saving for retirement vs. college (“There are no scholarships for Top 10 Retirees”). One recent survey found that while parents overall are guilty of irresponsibly prioritizing their kids’ college savings over their own retirements, single moms are especially egregious in this regard.
- Cold-hard facts about why you have to start saving early
- Realistic goals (my fav).
I actually learned a lot from Stuart (least of which is how the 529 got its name. Ladies, what would YOU name it if you could??), even though I’m a personal finance journalist. Have a look. And for more info on college savings, head to T. Rowe Price’s college page.
T. Rowe Price sponsored this post.
Emma Johnson is a veteran money writer, noted blogger, bestselling author and an host of the award-winning podcast, Like a Mother with Emma Johnson. A former Associated Press Financial Wire reporter and MSN Money columnist, Emma has written for the New York Times, Wall Street Journal, Forbes, Glamour, Oprah.com, REAL SIMPLE, Parenting, USA Today and others.
The Kickass Single Mom: Be Financially Independent, Discover Your Sexiest Self, and Raise Fabulous, Happy Children (Penguin, 2017), was a #1 bestseller and was featured in hundreds of media, including The New York Times, Wall Street Journal, Fox & Friends, Oprah.com and the New York Post, which named it to its ‘Must Read” list.
Her popular blog Wealthysinglemommy.com, and podcast Like a Mother, explore issues facing professional single moms: business and career, money, sex, relationships and parenting. Emma regularly comments on these topics for outlets such as CNN, Headline News, New York Times, Wall Street Journal, Fox & Friends, CNBC, NPR, TIME, MONEY, O, The Oprah Magazine, Woman’s Day, The Doctors, and many more. She was named Parents magazine’s “Best of the Web,” one of “20 Personal Finance Influencers to Follow on Twitter” by AOL DailyFinance, “Top 15 Personal Finance Podcasts” by U.S. News, and “Most Eligible New Yorkers” by New York Observer.
A popular speaker on gender equality, Emma presented at the United Nations Summit for Gender Equality.
Emma grew up in Sycamore, Ill., and lives in New York City with her children.