Most people have more than one place they’d like to put their money. The key to making the most of your money is figuring out how to prioritize each of your options. Should I save for a goal or pay more on my debt? Should I start (or add to) a college fund for my child or save for my own retirement? Should I pay down my student loans or start an emergency fund? These are all valid, important questions.
The good news: in most cases, you can tackle more than one goal at once.
Paying Down Student Debt vs. Saving for Retirement
Debt-free is a great feeling, and it’s something many graduating seniors are wishing for. Should new graduates get those loans paid off before tackling other goals? Not necessarily. While paying down student loans is an important goal, it’s also important to start to save for retirement. In fact, the first years of working are the most important ones to start saving, because this money has the most time to grow, so it will make the biggest impact on the amount you have when you’re ready to retire. Find a balance you can live with, like contributing at least enough to your retirement plan to get an employer match while paying at least the minimum on student loans.
Buying a House vs. Saving for Retirement
Ohioans dreaming of home ownership may be tempted to cash in their retirement balance to help buy their first home. But this sabotages the momentum built from contributing early to a retirement account – money that has the most time to grow will make the biggest difference to the amount you have available when you want to retire. Instead, save a portion of your paycheck after you’ve contributed to retirement. For more ideas, check out the home buyer resources from Ohio Saves. When you’re close to ready to buy, Ohio Extension’s Homebuyer Guide is a great resource to give you all the tools for a successful home purchase.
Saving for Your Childs College vs. Saving for Retirement
Parents want the best for their children. In helping your child pursue higher education, you may be tempted to forgo saving for retirement for a while or even to tap into retirement accounts. However, financial experts warn against this. Motivated students can find scholarships, grants, tuition-reimbursement plans from employers, student loans, and many other resources, but these options are not available for retirement. For more information on effectively saving for college after you’ve contributed dollars toward your own retirement each month, see College Saving Options(PDF).
Get Started During National Save for Retirement Week, October 19-25, 2014
National Save for Retirement Week is an opportunity for employers to make employees aware of how critical it is to save now for their financial future, promote the benefits of saving for retirement, and encourage employees to take full advantage of their employer-sponsored plans by starting or increasing their contributions. Encourage your employer to participate and learn more at http://www.nagdca.org/dnn/NewsEvents/NS4RW.aspx
