? The Fastest Four Minutes in Finance: Secure Yourself Before Your Kids

I’m sure you’ve heard it many times when you’ve boarded a plane, and your flight is about to take off???

During the safety instructions, a flight attendant reminds us if we are traveling with small children and there is oxygen loss in the cabin we should make sure our own oxygen mask is attached securely, before helping our children.

Adults are not taking that recommendation when it comes to?helping their kids with money.?

According to a new?Bankrate report,?68% of parents with kids 18 or older say they have sacrificed their own finances to help their children.??

More specifically, 51% of those adults report they’ve?sacrificed their emergency savings?to help their kids. 49% say they have?delayed paying off their own debt, to help their kids. And perhaps the worst stat, 43% have?drained their retirement savings?to help pay for things for their kids???

We should recognize that inflation and the high cost of rent and housing have certainly made it difficult for young adults to get a solid financial footing. But, this report highlights an alarming trend that needs attention.?

It can seem very sacrificial to hurt your own financial situation for you children. But, it can actually?hurt them?in the long run.?

If you withdraw retirement funds to pay for your kids’ college, or even if you reduce your contributions to your retirement, you risk not having the money you need in retirement. Notice here we’re not saying the money you?want. It’s one thing to skip a few vacations in retirement so your kids don’t have student loan debt. It’s another to not be able to pay for prescription drugs, or have assets to pay for Long Term Care because you chose to make a down payment on your kids’ first home, because guess where the burden lies if you do.?You could be setting your kids’ up to have to pay for your care or your retirement expenses.??

It's a great idea to pay for your kids’ college, but if you can’t cash flow it, after you’ve paid your expenses, and made contributions to your own retirement, we would suggest a different path.?

You and your children could get more diligent about applying for scholarships, they could find a work study at some universities to help pay for school, and even a student loan is a better path.?

The Bankrate survey also found that parents think people should cover their own cell phone, credit card and car insurance starting at around age 20, but it was more acceptable to get financial help for longer with bigger bills like housing, health insurance, and student loans.?

Every household is unique, and there is no magic age that you should hand over all the finances to your children.?

The bottom line though, is there should be an?order?to things. The oxygen mask analogy is fitting.?You can’t help your children if you can’t breathe.?Choking on your own financial burdens leaves you in bad shape to try to keep others financially breathing.

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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance. Independent Advisor Alliance and GenWealth Financial Advisors are separate entities from LPL Financial.