Life with children is not for the faint of heart - or wallet. The cost of rent or mortgage, insurance, car payments and food being what they are these days, taking care of your family’s basic needs can put a strain on almost any budget. You want to start squirreling away at least a little something for your future retirement and your children’s pending college costs, but how?

“The balancing act is a tough one and may [people] struggle to find a way to make it work,” says Jennifer Ridley Hanson, Director of Financial Planning for www.financialfinesse.com, a company that
company helps educate people on how to better invest and save their pennies through their national seminars, a radio show and live or over-the-phone assistance. “Sending your children to college is an important goal for most couples, but so is retirement.”

But where should you begin? Is saving for both even possible?

Ridley Hanson says it is. The trick is to make it a part of your monthly routine.

“Many people make the mistake of waiting until all of the monthly bills are paid and then they save what - if anything - is left over,” she says. “The problem with this strategy is that there may not be anything left over, or leftover money can get spent on something else.” If you have budgeted all you can and there really isn’t anything left, Ridley Hanson suggests you re-evaluate your spending and cut away what is not absolutely necessary. “If you don’t get into the savings habit now, it will not get any easier in the future and you’re losing valuable time for your retirement and college investments to grow,” she adds.

When to Start?
Whether you child is 16 days old or 16 years, most financial experts say it is never too late to start saving for college. The same is true for your retirement.

“Any amount of money - no matter how small - saved today, will have a greater value tomorrow,” says Michael Darne, Director of Business Development at www.collegeanswer.com a site produced by Sallie Mae for college-bound students, their parents and guidance counselors. "Investing just a few dollars a week from the time a child is born can grow significantly over 18 years. If you can’t put away as much as you think you will need, don't give up. Something is better than nothing."

“The best way to begin is to think about what you can realistically accomplish based on your current situation and time frame,” Ridley Hanson says. “If you’re 55 and want to retire at 60, it may not be possible to save $1,000,000 in [that time]. Look at what you can really save and then look at the best way to save it.”

Also realize that you may not be able to do it all as far as saving for college goes, nor do you have to. According to The College Board, 40 percent of students in four-year schools contribute less than $4,000 towards college costs while almost 70% pay less than $8,000. Much of the balance is paid via financial aid, grants, loans or by the students working between or after classes. The US Department of Education says that almost $75 billion is awarded annually in grants and loans.

“Kids can work their way through college, but Mom and Dad can't work their way through retirement when they are 80 and 90 years old,” Ridley Hanson says. “Parents who sacrifice their retirement savings in order to send their kids to college may become financially dependent on those kids in the future if they don’t have enough for themselves.”

For some families, college and retirement can come around at the same time. If that is your reality, you can invest in a general investment pool, which can be tapped to pay for each goal as needed. Listed below are some of the most common vehicles families just like yours look to invest their savings. Be sure to speak with a financial planner, tax advisor or other financial expert for more information on what would work best for your family’s needs.

Savings Bonds - Generally considered relatively safe investment vehicles, savings bonds are fully backed by the US Government. Their rate of growth is relatively slow (maturity takes a number of years) and may not yield enough not keep up with the rate of inflation if used alone.

Existing Individual Retirement Account and Roth IRAs - Withdrawals from either IRA can be used to pay for qualified higher education expenses without the 10% IRS early withdrawal penalty.

Section 529 Plans - Many states now offer college savings program lets you put money away (as little as $25 to open) then transfer your investment to any accredited college or technical school in the country.

Remember, saving a little is better than saving nothing. The sooner you start, the more you’ll have when you need it.

Felicia Hodges is the editor of Tri-County Woman and Tri-County Woman Online! magazines.

©2008 Tigerlily Communications