It's an after-school routine that plenty of parents are used to: Fetch the kids from the bus stop, whisk them off to sports practice, hurry home for a quick dinner, run back out for music lessons, and then head back home to finish up homework before the "go-to-bed" battles begin.
If this reads like a tiring routine, well, that's because it certainly can be. But it can also be an expensive one.
Many parents spend thousands of dollars each year to enroll their kids in sports, dance, and the many other activities they beg to participate in. And that doesn't even include the cost of actual child care, which can be many more thousands of dollars.
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As such, it's easy to fall into a routine where you're spending so much money each month on child-related activities that there's none left over to put into your IRA or 401(k) plan. But if you don't make sure to prioritize your retirement savings, you might end up regretful once your senior years come around.
You can't afford to neglect your future
It's easy to tell yourself you're only putting off retirement savings temporarily so you can focus on exposing your kids to a variety of enriching activities. But the reality is that children's activities don't tend to be a limited-time expense.
Sure, the things your kids want to do might change over time. They might beg to enroll in martial arts in third grade, only to ask to switch over to baseball or basketball once they reach middle school. But either way, the pressure to pay for children's activities can be persistent.
It can start when your kids are old enough to speak and last all the way until they're ready for college (at which point, you'll get to take on yet another massive expense). So it's important to find a way for your retirement savings to take priority.
If you don't put your nest egg first, you might end up cash-strapped once retirement rolls around and you're forced to rely on Social Security income way more than you'd like to. But also, neglecting your own savings could put you in a position where you actually have to turn to your children for financial support once they're grown and working. And that's probably the last thing you want.
If you can't remember the last time you put money into your IRA or 401(k) but are currently spending thousands of dollars a year on your kids' various activities, do an audit to see how much each one costs. Then, sit them down and tell them it's time for a change.
Explain that you can't afford to be shelling out so much money to keep them busy, and ask them to limit themselves to a single activity per school year. Or if there's a specific activity that's notably more expensive than all of the others, shed that one alone.
Your children can grow up to be talented, well-rounded adults without being enrolled in four or five activities per year. Shedding some of those activities might not only free up money for your retirement savings, but also make for a much less frazzled after-school experience.
