It’s not a secret that many Americans are struggling financially right now.
According to a recent Gallup poll, nearly 40% of Americans said they are “very” or “somewhat” financially stressed and a whopping 53% said they had made significant financial sacrifices to reduce their monthly payments.
And a whopping 43% of those polled said they were struggling to save for retirement.
With that in mind, we decided to explore what it takes to get started saving for your retirement.
And if you’re like most Americans, you’ve probably already started to tackle the first big financial decision of your retirement: your child’s college tuition.
As a parent, you have a significant financial stake in your child graduating from college.
Whether it’s the amount of time your child spends at the school, whether they attend the college, the scholarships they receive, or the amount they earn, the money you’ve given them and the financial resources you’ve set aside to support them will make a huge difference in the years ahead.
In this post, we’re going to outline the key elements of a well-balanced financial plan, including how to budget for retirement, what financial planning advice you need to know and how to save and invest for your child.
In addition, we’ll share how to avoid pitfalls that can cause your child to delay their college education, including a checklist of tips for making informed decisions about whether you want to help them go to college or not.
For those of you who are already planning for your family’s college experience, you’re going the extra mile with these important tips to prepare your family for college:Consider financial aid to help support your child, even if you don’t have enough money to cover your own college expenses.
A financial aid package can be an important first step in your financial planning, and a financial aid plan can be especially helpful for families that can’t afford to pay tuition.
You’ll need to set aside a significant portion of your money each month to help your child pay for college.
Your child may be able to qualify for federal student aid, or state or private loans.
If you can’t, you can use a 529 savings plan to cover tuition for your children and the cost of tuition fees for your entire family.
And many 529 plans allow your child or grandchildren to contribute as much as they like to help you cover your costs.
(To learn more about 529 plans, see our article on 529 plans .)
If you don�t have enough savings to pay for your kids college, consider investing in the stock market.
There are many funds, such as the Vanguard, that allow you to buy and sell stocks at a discount to their market value.
These options allow you the flexibility to invest in stocks with a low cost of capital.
If your family doesn�t qualify for the 529 program, they can use the same strategies that you can to invest.
For more on this topic, see the Financial Planning and Investment Resources section of our article.
Consider putting away your retirement savings in a separate investment account.
If this is not an option, you should also consider putting your retirement money into a personal retirement account (PRA).
This is a savings account that you have control over and can invest in your children� college fund.
The PRA also allows you to use money from the account to pay the tuition of your child�s college expenses at any time during their school years.
If there is an annual fee associated with the PRA, you could potentially contribute as little as $50 per year.
If you can, consider putting some of your savings into a retirement savings plan.
You can set up a 401(k) or other retirement savings plans to help pay for expenses while you work.
(Learn more about the retirement accounts we recommend for you and how they can help you save for college.)
You can also create a 529 plan that allows your children to contribute up to $25,000 per year to your account, with up to 10% of the money invested to cover their tuition costs.
The 529 plan must have a $25K minimum contribution.
You can also choose to invest your childs college savings in mutual funds.
Some mutual funds, like Vanguard and Vanguard Total Return, allow parents to set up investment accounts that they can invest their children�s investment income in.
But if you can�t afford to contribute to a 529 account, you may need to invest some of the family�s savings in your own retirement account.
If your child can�ve graduated from college, you’ll want to set them up with an adviser to help plan the rest of their future.
Some advisers will offer financial planning help, but you’ll also need to find out if they are offering a financial advisory.
You should call or email your adviser to find if they have financial advisory services, or you can go to your local financial planning office and schedule an appointment with a counselor to help guide you through your financial plan.