Saving money is important, whether it’s for retirement, college, emergencies, or vacations. But what can be done when facing the costs of both saving for retirement and, often approaching more quickly, the costs of sending children to college? Should you be saving for your own retirement or for your kids’ college funds? How much should be saved for each?

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The costs of attending college have increased enormously over the last decade or so, and that trend is likely to continue.

Saving for a college fund can be an excellent investment into a child’s future, especially since they may not be able to make hefty loan payments in the initial years following graduation. Like 401(k) and other retirement savings programs, a 529 college savings plan has tax incentives in addition to providing security for future college students.

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Retirement costs, on the other hand, aren’t child’s play, either. While many people believe their expenses will decrease in retirement, the costs of nearly everything else is on the rise, including health insurance and other big-ticket items likely to be important for those over 60 years of age.

So in an ideal world, families would save substantially for both expected long retirement years and full college tuition for each child. However, since it can be difficult to come up with any extra funds at the end of a paycheck with growing children and real-world expenses, many parents face difficult choices about where to funnel their savings.

My kid’s college fund or my retirement?

If money’s tight and you’re not sure what to do, think of it this way: your kids can and will find a way to fund their college expenses, regardless of whether you have a nice college fund ready for them. There are scholarships and loans they can apply for.

Your retirement, however, doesn’t have the luxury of getting paid for in this manner. There are no scholarships or financial aid to help you. This is why saving is so important.

Make it a goal to max out your retirement accounts each year, and save whatever is left over in a high-yield savings account for an emergency fund.

Take a look at the big picture

An important step is to take a look at the big picture to help develop goals and structure to the savings plan and how much to save for retirement and/or college.

Plot out the expected dates each child is expected to enter college, and what year retirement is expected. What is the gap between now and the first of these events? Break this down to a weekly or monthly figure and start crunching numbers to see how much you can realistically add up in that time.

Saving $100 per week will yield a principle investment of $5,200 per year, not counting interest. In ten years, that’s $52,000 without interest, which may pay for four years or more of college for one child, but perhaps only one or two years (or less) in retirement funds.

Set goals and strike a balance

What amounts will realistically pay for a few years of college or for potentially decades of retirement? How much of the budget can be diverted to each? While college is costly, it is likely that student loan money will be available to future students as well as scholarships and grants to preferred students.

Is it a reasonable goal to try to raise enough to pay for college entirely while still diverting enough to a much more costly retirement? If not, consider focusing on retirement funds first in the savings plan, and a college fund as a secondary measure.

While student debt can place an enormous burden on graduates entering the workplace, so can having parents without ample resources in their retirement years.