Saving for my kids’ educations - where finance becomes personal
The “conventional” wisdom of debt reduction touts building a small (usually $1000) emergency fund and then throwing everything else you can at the debt. This works for me. I’ve established the emergency fund and I am working hard to throw everything I can find at the debt. Except.
I have budgeted a small amount each month ($25 each child) to go into my kids’ college funds. Does it make sense? No, not mathematically. Run the numbers and my kids college accounts are earning less interest than my debt is charging me.
But personal finance is more than just money and numbers and mathematics. And this is personal.
It is important to me to save money for my children’s educations. I know I could put that on hold and continue after we are not in debt, and at a higher amount to boot. The $50 a month I am currently saving for them would make our debt total shrink faster if applied there instead. But I can’t let myself lose momentum. I’m finally budgeting to put away money for my kids (and doing it!), and I, emotionally, need to keep going with that. I plan to deposit much more than that per month once the debt is gone, but I can’t just stop and go to zero until that happens. I need to see the college savings balances grow bit by bit, steadily upwards to help remind me of what the debt reduction effort is all about — a better life for me and my family. It may not make complete mathematical sense, but the power of compound interest for their college accounts tugs at my heartstrings and tells me this is the right decision for our family’s financial future.
Similar to how some people will attack their debt from the smallest balance to largest instead of highest interest to lowest, this is something that I need to do for our family to keep us on track. It may not make the most solid of mathematical sense, but it can indeed make financial sense. It is why personal finance is so unique and tailored to each person and a rigid set of rules can’t work for everyone. Personal finance *is* personal, and the little twists and quirks and spins we all interject is what makes it what it is. And what makes it all so fascinating to me and keeps me reading everyone else’s stories and takes on their financial future. Whatever keeps us all moving forward, focused, and energized, and on the path we want to be, that’s what matters.
There’s my personal in personal finance. What’s yours?
If you enjoyed this post, make sure you subscribe to my RSS feed!
Related entries for your reading pleasure:
5 Responses to “Saving for my kids’ educations - where finance becomes personal”