Build Your Financial Security Before It Is Too Late

When you're busy raising kids, it's all too common to fall into a financial trap. While everyone knows it is best to prioritize saving for retirement, many parents struggle with that strategy. What tends to happen is that they tell themselves that once the kids are grown and out of the house, they will double down on getting ready for retirement.

New research from the Center for Retirement Studies at Boston College suggests that's not how it seems to work in reality. They found that even after the kids are out of the house, parents don't make much progress on building financial security.

The researchers analyzed household mortgage debt and found that families didn't accelerate paying off their mortgage after the kids left the house. And the researchers ruled out that parents' income was going toward continuing to support adult kids.

What they did find was that parents with grown kids work less. That may be by choice, or by being pushed out the door. That's not necessarily a problem if those households are also reducing their spending. But when the researchers looked at net worth (all your assets minus all your debts) they didn't see improvement among parents whose kids were off adulting.

While researchers are still trying to figure out what's causing those households to not increase their net worth, I am focused on one takeaway: Parents that think they will get ahead on building financial security once the kids are grown, don't seem able to pull that off.

And that could create a lot of stress later on for them, and for their grown children who may need to step in and provide financial support.

That is a scenario no one wants.

My heartfelt advice for all parents with young children is to not wait to build financial security. Make it your goal to work on your future security starting today.

Commit to saving more in your retirement accounts today.

Work as a family to choose colleges that will deliver a financial aid package that does not require the parents to borrow.

Always look to pay as little as possible to buy the car that meets your needs, and drive it for as many years as possible after you have paid off the loan.

Same goal for a home, whether it be a rental or purchase. You must live someplace that meets your needs, but you do not overstretch.

When you focus on buying only what you need, you free up more money to put toward building financial security. Your future older self, and your future older grown kids, are going to be so happy you made that choice.