FOR IMMEDIATE RELEASE
Washington, DC, April 17, 2015 — “Much has been written about the cost of a college education and the debt burden being placed on our children,” says Pressman, a CERTIFIED FINANCIAL PLANNER™ Practitioner with Egan, Berger & Weiner, LLC.
“According to the Wall Street Journal, today’s grads are saddled with, on average, $33,000 in student loans — nearly twice the amount of just 20 years ago. Start factoring in advanced degrees or more expensive schools, and you can see how the cost can quickly spiral out of control,” he explains.
Pressman notes that 2014 college graduates have the dubious distinction of carrying the highest student loan debt in history.
What can you do to keep this from happening to your kids?
“One obvious solution is to save early and save often, but, saving alone sometimes isn’t enough,” he realizes. “Perhaps your children are in high school, but if you start saving for college now, there just isn’t enough time. Maybe you have several children, and there’s no way to save enough to cover the college costs for all of them. Or maybe there just isn’t room in the budget to save for everything.”
Sometimes we have to prioritize, Pressman explains.
“So often, I find myself having this difficult conversation with parents, and my advice is always the same: Prioritize your retirement above your kids’ college,” he says. “This can be difficult for parents; after all, a big part of being a parent is putting your child’s needs above your own. But the cold, hard fact is that there are times when you have to put yourself first.”
There are plenty of ways for kids to borrow and finance their education, but there is no way for retirees to borrow for their retirement. Acting on this knowledge can be a tough pill for parents to swallow.
Case in Point
Among Pressman’s clients are a married couple with twin 14-year old boys. When the couple first met with Pressman, they explained that they would like to fully pay for the boys’ college education.
They have set aside some money for this purpose, in addition to money earmarked for retirement. After creating a comprehensive financial plan for them, however, it was clear that there just wasn’t enough money saved to fully meet both goals.
“My clients took the news well, but did not want to see their boys saddled with debt before they even got their first job after college. So together, we came up with a plan where they would pay for half the costs of college, and their boys would cover the other half,” says Pressman.
The bottom line: Fully paying for college isn’t a realistic goal for many parents.
This is evident by the fact that 70 percent of today’s college graduates leave school with student debt. But this isn’t necessarily a bad thing. Sharing the costs of higher education with your kids can be a great way to teach them the value of money, the value of an education, and the importance of pursuing a career that will be fulfilling and rewarding — and will also pay the bills.
“As I think about what I want for my own daughter, I certainly want her to have a solid education. But even more than that, I want her to be a good person who demonstrates understanding and kindness.”
Questions? Thoughts? Ideas?
- Watch EBW’s Financial News TV
- Learn more about planning ahead for retirement on EBW’s Finance Rules Radio Show.
- Read the EBW Retirement column in Be Inkandescent magazine.
- Send an email to Hope Katz Gibbs, founder, Inkandescent Public Relations, www.inkandescentpr.com.
About Howard Pressman, CFP®
- 16 years of experience in the financial industry
- Georgetown University Financial Planning graduate
- CERTIFIED FINANCIAL PLANNER™ Practitioner
- Financial Planning Association National Capital Area chapter board member
Pressman has written numerous articles on financial planning for local newspapers and for the CFP® Board’s newsletter. He volunteers with several local nonprofit organizations, lecturing and teaching financial planning basics to families who may not otherwise have access to a financial planner. Pressman is a lifelong Washingtonian and lives on Capitol Hill with his wife, Erica, and their daughter, Tali.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
Egan, Berger & Weiner, LLC is an independent financial services firm based in Northern Virginia. EBW associates have decades of experience in helping clients plan ahead for retirement.
Securities and Investment Advisory Services offered through Voya Financial Advisors, Inc., member SIPC. Egan, Berger & Weiner, LLC is not a subsidiary of nor controlled by Voya Financial Advisors.