According to TD American surveys, millennial parents have an average of $9,100 in student debt. They are very much aware of the financial realities of higher education. By the time their children reach college, about one-third of millennials expect to still have loan payments.
To avoid children to inherit similar financial failures, 90 percent said they plan to pay at least part of their children's college fees and 19 percent said education is their top financial priority. Millennial parents are setting aside an average of $310 per month for the next generation's schooling, while grandparents contribute an additional $205 monthly, Benzinga reported.
Education is top priority in family budgets, emergency savings rank second in millennial priority and retirement funds rank third. Millennials are juggling spending around $230,000 for first 18 years of raising one child, then add buying the first home and paying down their own college debt, said Dara Luber, retirement and investing expert at TD Ameritrade.
Millennial parents' plan might backfire if they neglect saving for their own retirement. Neglect of their retirement accounts can prove detrimental to the very children they're working to empower. It is important that parents not be a burden to their kids, Luber said.
TD Ameritrade found that an average millennial parent receives an average of $11,011 per year which includes combined financial support and unpaid labor from their parents. About 54 percent of grandparents reported that it is very stressful to save for retirement while supporting adult children and 80 percent said they won't decrease their contributions. Those who said they will lessen aid for their aging parents were 98 percent.
About 95 percent said they aren't willing to lessen financial support for aging parents and 88 percent said they won't spend less on their children. Luber said nearly one-third of millennial parents said they would work longer to make up the difference.
Luber said the "pay yourself first" financial strategy is still advised. It's important to cover own retirement first, emergency fund comes second and education third. It is important to save early and save often.
