Yet many people in their early 30s have either already started a family or plan to do so in the near future. That raises the question of how to balance your own financial needs against those of your children in order to reduce the odds that your kids will suffer under the crippling weight of excessive student loans of their own.
Let's look at some tips for getting your own debt paid down and for preparing for potential family educational costs down the road.
1. Put Student Loans in Their Place.
Many borrowers assume that they should always pay down their student loans as quickly as possible. Yet even though paying off those loans can give you a psychological boost, it's not necessarily the smartest move if you have other debt with less generous terms and higher finance charges. By understanding the terms of your student loans as well as credit-card agreements, car loans, mortgages, and other debt you might have, you can identify the highest-cost debt you have and prioritize getting that paid off first. Even if that means waiting longer to retire your student loans, doing so will still save you money in the long run.
2. Don't Skimp on Savings.
Whether to put money toward savings and investing when you have outstanding student loan debt is a subject of debate, with good arguments on both sides.
3. Make Your Employer Pay for More School.
As you advance in your career, getting more education and boosting your skills might be a lucrative move. But once you're in the workforce, you don't necessarily have to pay for those classes yourself anymore. Many employers have recognized the value of investing in their employees through tuition reimbursement programs, which will pay you back for all or part of your costs. Availability and conditions differ from company to company, and typically, the education has to be connected to your job. But they're a great way to avoid adding to your student loan debt.
4. Don't Let Student Loan Debt Hit You Twice.
As heavy a burden as today's young graduates carry, educational debt among their parents is also reaching epidemic levels. In 2011, parents received $10.6 billion in Parent PLUS loans, a 145 percent increase since 2000, even adjusted for inflation, according to a study from The Chronicle of Higher Education and ProPublica. And the size of average individual loan is up as well, by about a third to nearly $12,000 in constant dollars. If you have kids or plan to, you'll want to take steps to ensure you don't end up facing a huge loan burden a second time around.
Put time on your side by setting up savings programs for their college educations now. As your income grows and you rise into higher tax brackets, the advantages of using a tax-favored college savings strategy such as a 529 plan increase in value. As with any market-based investment and saving strategy, 529 plans work best when you give them as much time as possible to produce strong returns. Moreover, 529 plans have very small minimum starting investments, so you can start a account without placing too big a burden on your finances.
You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+. He has no position in any stocks mentioned. The Motley Fool recommends Home Depot and United Parcel Service. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days.