To Your Financial Health

Financial Health

As human beings, we face a myriad of potential health risks over our lifetimes beginning at birth. While children, responsible parents make sure we have the necessary inoculations when recommended, and appropriate, periodic doctor visits. Responsible parents also want to ensure that their kids have as many as possible of the necessities needed for a comfortable, meaningful life. Going off to college should be a part of that life. Unfortunately, when it comes time for thinking about college, too casual an approach is taken. Denial has taken over which too often leads to an “unhealthy” financial life. It could be a life full of stress, anxiety and fear – literally making one sick.

Here’s my prescription for a healthy financial lifestyle as it relates to college and retirement. First, begin early. Find out the best ways to save for college – not all savings plans which one reads and hears about from so-called experts and the media are equal, and then begin a college savings program. I realize that many young families will have trouble putting away money in their children’s early years, but even saving a little each month, like $50 which can be increased over time, will make a great difference when that first bill arrives for college.

Secondly, participate in your company’s retirement program up to the free match if there is one, or create an IRA, also with small sums to begin with. Over time with compounding you will also have made some real progress toward the retirement years. But keep in mind, college comes years before retirement, and if you pay or borrow too much for college you will have less for retirement. Experience tells us that if one has done little towards saving for college, the 401k or IRA are some of the first assets liquidated. Now you have a double-fold problem: little money for college and retirement. Where does that lead to: an unhealthy financial future?

I have mentioned in previous articles that college for most families will be the single most expensive outlay in their lifetimes. I have found over 20 years as a financial advisor that every prediction on the future costs of a college education have proven accurate. It was estimated back then that it would cost about $250,000 to attend a four year private, elite college today. That number has now even been exceeded. The current projection expects that cost to reach $400,000 in 18 years time. It’s mind-boggling!

When we are young parents, we have many dreams such as owning a home, driving a nice car, taking exotic vacations, amongst others, and sending one’s children to college for a great education should also be part of those dreams. Unfortunately, for most families the college part of that dream has been neglected, and then in the later high school years that grotesquely, high cost of college shows its face. That would make me feel really sick.


Share this Story


About Melvin Chilewich

Melvin Chilewich, JD, is a Registered Investment Advisor and Financial Services Professional who specializes in showing people a better way to save and accumulate money so that they can reach financial independence as quickly as possible. He also concentrates much of his time advising families and other professionals on how to maximize college financial aid and reduce out of pocket expenses. He believes that the cost of college today is quite daunting for parents and he teaches them how the financial side of the college admissions process works. He has saved families thousands of dollars on the cost of college. His philosophy: Save money on college, have more for retirement.

Leave a Reply

Your email address will not be published. Required fields are marked *