RICHMOND, VA (WWBT) - During tough economic times, many families are struggling to save money but, when it comes to your children's' college funds and your retirement fund financial advisors say it is important to put your money in the right place.
Leslie Strader says with three young children, the family budget is tight. It's easy for other expenses to get in the way of saving for college and retirement.
"There are always trees to trim or a weird noise in your car or braces," Leslie said.
So Leslie and her husband came up with a plan. A little for their own retirement, a little for their kids' college funds.
"We are going to save this much for you and if you decide to go somewhere that is more than this much then you are going to participate and be responsible-- there are no free rides at our house," she said.
While there are no free rides at the Strader household, Investment Consultant Steve Mills says many families are torn between retirement and college. When in doubt, he says the best plan is save for both.
"Fortunately these days you have vehicles you can use to solve both of those problems," said Steve Mills, Mills Bay Consulting, Wells Fargo.
And these vehicles are a 401-K plan or a Roth IRA where money grows tax deferred. When it's time for college there are ways to take money out, or leave it in.
"It is a constant battle I think for people especially when their kids are young," Mills said.
Leslie says it's hard to focus on retirement when it's so far away.
"It is not like, 'Oh my gosh, we have to have a million dollars in 10 years.'" Leslie said.
But Mill says be careful. If you must choose, pick retirement.
"There are scholarships available, there are loans, and there are grants. If you want to have any kind of a lifestyle at all when you retire you are going to need to save for it because Uncle Sam is probably not going to take care of you in the manner of which you currently do," he said.
So, be wise now, and your kids will thank you later. Financial advisors recommend saving at least 10 percent of your salary and as your income grows, increase the amount you save.