Who Are We Saving For?

Earlier this week, I wrote about how much money you might need to actually retire. Today i’m going to write about who we are actually saving for.

All through our working lives we assumed that we were saving for our children. We always thought that in our retirement we would be using our pension and social security. Maybe use some of our savings and 401K, however the majority would pass eventually to our children.

It was a great revelation to us when we realized that maybe this wasn’t the best use of our money. Maybe it sounds selfish, but it is our money that we have worked for all our life so it is not unfair of us to use it.

Now obviously we are not putting our kids out on the street. We have fully funded 529 plans for them. We have college covered, except in the most extreme cases like a very expensive uiversity or them deciding to go to law or medical school.

We decided a long time ago, that where possible we would like to not burden our kids with student loans if we can help it. However if they go to an expensive college it will be very hard to pay for everything. Like everything it is about striking a balance.

Our plan of course is that hopefully our money will still grow or at the bare minimum not drop in value. I don’t think it is likely that we will radically change our sending habits once the kids leave home. We plan to travel more, certainly, but I don’t think we will be ostentatious.

Even if we do have little money left over in later life for our children there will always be our house. AsĀ I wrote before i’m not a big believer that house growth is the be all and end all of wealth growth, but the house should grow in value and provide an asset for selling off.

I do want our kids to have everything they need to have a good start in life, but i’m not sure that the best policy is to provide such a large amount of money that they don’t need to gain a hard work ethic. However we do need to provide enough money and support to allow them to follow their dreams and be who they want to be.

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