In the US, nearly three in four parents who took out student loans for their children end up having to put their own financial goals on hold, including postponing retirement or buying a home. And that also meant no student loan debt.Īs higher education costs continue to soar, opting to enroll in a lower-cost college or shifting to a two-year college is one way to avoid getting saddled with debt - and that includes for students as well as their parents. He wasn't in a rush to get married, either, despite pressure from his grandparents.Īfter considering various options, we decided that an associate of applied science degree would provide him with a clear job path and sufficient income to meet his lifestyle and goals, while still allowing him to invest for the future.
He wanted to continue prioritizing time with friends and family, and to keep living in his comfortable apartment. I began by asking Gavin about his values and what he wants his life to look like. For my parents, the most important element in choosing a school and career path was income calculation.īut my approach was different. My older family members expressed strong disapproval when my son decided to go to community college. An expensive degree no longer equals financial success Here are three old-school financial rules that we shouldn't teach our kids anymore - and what we should teach them instead.
And instead of following a clearly defined script, young people today are more inclined to take a path that makes sense based on their lifestyle, their priorities and their current prospects in a changing economic landscape. I've learned that for his generation, the emphasis is on creating a good life now, rather than waiting for retirement to start living. Work for a couple of decades and retire.Įven though I started on the "right" path, things still fell apart, and I had to set up new personalized goals for myself. For example, I was given a list of tasks I was "supposed" to achieve to be successful: Earn a four-year degree. Many of the lessons and rules regarding finances, investing and building a career that my parents taught me are simply obsolete today. In teaching Gavin about finances, I've not only had to adapt to new technologies - I've also had to adopt commonsense approaches and advice that actually translate to the current world. The old rules no longer applyĭigital tools aren't the only things that have changed since I was a child. It's a visual and interactive method I didn't have access to at his age - and my parents couldn't even imagine. That way he can evaluate if his spending matches his goals and can tweak his habits accordingly. In addition to investing tools, my son has access to money management apps that connect to his bank account and show him where his money is going. We also constructed a plan to achieve multiple goals: beefing up his emergency fund until the amount doubled, and then focusing on increasing his weekly investment. These days, my son was able to open a Roth IRA, invest his first $10 and set up a recurring transfer in just 10 minutes, without leaving his room. Investing apps didn't exist, and it was much harder to open an account.
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