Moneymentals | Our Blog

Saving for College vs. Retirement: A Difficult Balance

college versus retirement savingsMany responsible adults are saving for a dream: financial freedom. While financial freedom is something incremental rather than a destination or arrival point, it’s certainly a worthy aspiration and a reason to keep saving. Spending the rest of your life without having to work for pay (also commonly known as “retirement”) is something to look forward to. Then there’s a huge speed bump: the children’s college. What do you do about that? 

Prioritizing Retirement Savings over College Savings

Your children’s college plans shouldn’t usurp your retirement. Maybe you’ll retire in 30 years and your first child will be ready for college in 17 years. Still, saving for retirement is a higher priority. There are multiple ways to finance college—such as scholarships, grants, loans, and campus jobs—but there’s only one way to pay for retirement: saving. 


A Different Take on Socially Responsible Investing

When you look at the companies within a mutual fund you’ve invested in, are you a proud supporter of each one? Or are there certain industries you’d rather not finance? Companies in a mutual fund don’t come a la carte. The closest you can get to being able to pick and choose is Socially Responsible Investing (SRI) — but the effect is still questionable.

When you invest in a mutual fund (a collection of securities from various corporations), you’re automatically helping to finance companies that do a variety of different things — some of which may not coincide with your values. Mutual funds for SRI are designed to eliminate what are often called “sin stocks.” That way, you can invest in a mutual fund that has companies you consider ethical and still receive monetary gains.




Pick Up a Great Habit: Saving

I frequently get questions about how to invest and build long-term wealth. If you really want the secret of wealth-building, you have to be prepared for a simple, boring, tried-and-true answer: saving. When you focus on saving, everything else falls into place. Saving isn’t sexy, trendy or glamorous—but it works!