Having children changes everything, especially your finances. When it comes to long-term planning, a lot of parents have a hard time figuring out whether they should save for their own retirement or build a college fund for their children. 
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​The truth of the matter is that both college and retirement are expensive. Depending on how many children you have, college can end up costing hundreds of thousands of dollars. On the other hand, depending on when you plan to retire, you may need a million dollars or more. 

So, how do you start? What do you do first? How can you do both? 

As a parent, your first instinct may be to take care of your children first, in this case, it’s important to make sure you make your own needs a priority.

The main reason? You can’t pay for your retirement with loans. Well, you can use a home equity loan or credit cards but that’s not going to get you anywhere in the end.

On the other hand, there are a lot of options available to both parents and students to fund a college education, including Perkins, Stafford, and private loans. Plus, certain repayment plans are income-based which means they might be less expensive to pay back than you’d think. 

There are some factors to consider, though, including how much you already have saved for retirement, the students’ chances of getting a scholarship, what the student is planning to pursue in their studies, and where the student plans to attend.

The first situation is when parents already have significant retirement savings and their children have high GPA’s and are focused and driven toward a specific career goal. In this case, you should put college savings first. This is the only situation in which retirement savings should not be the priority.

The second situation is when the parents are in good financial shape for retirement but their child isn’t motivated, has no specific plans for the future, or doesn’t have a high GPA. In this scenario, the parents should focus on their own retirement savings while helping the student save when possible. 

The last two scenarios occur when parents don’t have enough saved for their retirement. In this case, if you have a student who is motivated with set goals and a high GPA, parents should focus on saving for their retirement and help the student when they can. If the student is not motivated, doesn’t know what they want to do, or has a low GPA, college savings should be left completely up to the student. 

In most of these scenarios, parents help out when they can. While it may seem harsh not to help your child in all scenarios, it’s important to remember that you have to take care of your own future first.