Millennials know student loan debt. Borrowers under 30 are carrying more than $376 billion in student loans and those ages 30 to 39 hold more than $408 billion, according to 2015 data from the Federal Reserve Bank of New York Consumer Credit Panel/Equifax.
For the parents in that group, it’s a burden they wouldn’t wish on the most annoying playground mom, much less their own children.
But when you have limited resources, how can you save for both college for your kids and retirement for yourself?
1. Get Your Priorities Straight
A recent NerdWallet study conducted online by Harris Poll found that millennial parents (ages 18-34) are prioritizing saving for retirement and saving for college at similar rates. Sixty-one percent of respondents called retirement a top long-term priority; 54 percent said the same of college.
Retirement should have a much wider lead, though, for a litany of reasons. Most notably, those student loans you know so well aren’t an option for retirement. Neither are scholarships, grants or work-study programs—aside from, well, work.
You want to help your kids avoid your debt-riddled fate, but it’s OK—financially prudent, even—to put college savings on the back burner until you’re saving enough for retirement.
2. Set Specific Goals
Saving “enough” for retirement generally means putting aside 10 to 15 percent of your income each year. A retirement calculator will give you a personalized recommendation. Even if you can’t meet it right now, it’s helpful to know what you’re working toward.
A college savings goal can be harder to target, but Fidelity Investments has a good rule of thumb: Multiply your child’s current age by $2,000. The result is what you should have invested as of now if you want to cover half the cost of a four-year public college.
3. Turn Debt Into Savings
It might not seem like it, but those student loan payments—and payments on other debts like car loans—will end eventually. When that happens, you can use the money you were putting toward debt payments to amp up your savings.
The same goes when you meet other savings goals, says Dan Joss, a certified financial planner in Williamsburg, Virginia. “If you’ve been saving for other things, shift that money,” he says.
Let’s say you’ve been building up a house down payment or emergency fund. When you hit your target, pop some champagne. Then direct the dollars you were allocating toward that goal into your college savings account, your retirement account or a combination of the two.
4. Take Advantage Of Changes In Income Or Expenses
If we all committed to increasing our savings rate each time we got a raise or a higher paying job, meeting our financial goals still wouldn’t be easy—but it would certainly be easier. Commit to this if you’re saving for both college and retirement.
You might also consider side gigs if you have the time or opportunity, says Justin Waller, a certified financial planner in Chico, California. If you do, he notes, “You have to compartmentalize that income and direct it toward something—give that money a purpose. You can say, ‘I made an extra $200 this week and blew it on random stuff,’ or you can say, ‘I made an extra $200 this week and put it toward my kid’s college savings.’”
Another opportunity to save more comes when you reduce your expenses. If your kids are in day care or preschool, you might have a big one looming. If they go to public elementary school, you could save hundreds of dollars each month.
5. Consider A Multitasking Account
In most cases, it’s worth compartmentalizing your saving. That means putting college money in a 529 college savings plan and retirement money in a 401(k) or individual retirement account.
But to straddle both goals, consider a Roth IRA. Because you make contributions with after-tax dollars, you can pull them out at any time, for any reason, without paying tax or penalties. Roths also allow early distributions of investment earnings for qualified education expenses with no penalty, though you may be taxed.
The article Yes, You Can Save for College and Retirement originally appeared on NerdWallet.