It appears Americans might finally be listening to Suze Orman, at least when it comes to not paying for their children’s college education. According to a survey recently published by Country Financial this week, more Americans say they believe it should be their first priority to plan for their own retirement, rather than putting money aside for their children’s higher scholing.

This is a radical change, and there are likely a number of factors that can explain the sudden finding, almost all related to the continuing impact of the Great Recession on the bottom line of American families.

First, Country Financial found the number of people saying they believed college was a good investment plunged in the past year, down to two-thirds from eighty percent in previous surveys. Country Financial could not explain the finding, but it’s no secret that well-credentialed 20somethings just entering the workforce from college are having an extremely hard time finding any employment, putting them in the same position of unemployed middle-aged workers (aka, the parents), who are also having a hard time getting a new job if they lose their current position, no matter how pedigreed their resumes.

Second, the stock market has essentially been flat for a decade, limiting investment gains in retirement and other savings accounts. Moreover, the real estate wealth accumulated by Americans in recent years turned out to be a financial mirage. As a result, the dire warnings about our financial prospects in our golden years proliferate. Just last week, the non-partisan Employee Benefit Research Institute in Washington released a study saying that just under half of Baby Boomers and Gen Xers are at serious risk of outliving their  savings.

Despite the negative economic news, however, college costs continue to increase at a pace above the rate of inflation, even as American incomes are being downsized. As a result,  cash-strapped parents simply have no choice but to heed the importunings of financial planners like Suze Orman, who have been preaching for years that that saving for retirement is much more important than paying for college. Children, folks like Orman argue, can always take out loans or go to less expensive schools, but we have only a limited number of years to save for retirement. Moreover,  junior might be grateful for a parent tuition assist now, but will be less than thrilled if that homegrown financial aid throws mom and dad into poverty in retirement, leaving them eating cat food in their old age unless their proud college graduate — who will likely be saving for his children’s university college costs at that point — steps in.

So hallelujah we are finally seeing financial sense? Well, not so fast.

Student loans can be crippling life burdens, and encouraging young adults who are unlikely to truly comprehend the life-altering consequences of debt to sign their John Hancock in lieu of parental payments can seem like one more bit of selfishness by the older generations, yet another bill foisted onto the young ‘uns, especially if mom and dad do have the ability to help out. Just under fifty percent of those surveyed told Country Financial surveyors that their own college debt had impacted their lives to some extent, with forty percent of those 18-29 describing the effect “significant.”

And, finally, parents crying uncle when it comes to showering money on their children might just be the worst economic indicator anyone has seen yet. Never mind falling housing and retail sales. Numerous studies have found that parents have continued to spend on their boys and girls over the past two years, even as they’ve cut back on their own personal expenditures. If that’s finally changing, we don’t need Nouriel Roubini to tell us the economy is probably double-dipping back into recession.

So what about you? Are you prioritizing your retirement over saving for your children’s future college expenses? Let us know.

More Poss:

Bethenny Frankel’s Mom Strikes Back

Coke Ends Facebook Campaign After Promoting Porn to Teens

Are the Real Housewives Violating Child Labor Laws?

Does Kate Gosselin Need Mommy “Me” Time?

Mad Men’s Bad Mom Receives Emmy Nod

Model Adrianne Curry Bashes Breastfeeding on Twitter

Meet The Original Grandparents

How to Talk to Children About Money

Arrested While Autistic

Proposed Airline Peanut Ban Cancelled

Parents Sue after Children Cut from Team

Could it Be Cheaper to Live in the City Than Suburbs

Whatever Happened to Flextime?

Leading British Fertility Specialist Says Women Should Have Children in Their Twenties

Photo: Harvard Yard by Daderot

Tweet

0

Pin It

Go Back To Strollerderby

0 Comments

Add your take:

Note: Babble is a supportive, diverse community. We encourage a range of opinions,
but any unduly hostile comments will be removed.