Don't: Fund your kids' college education at the expense of funding your own retirement.
Sounds cold-hearted, doesn't it? A prime example of Bad Dad-ness. I mean, what kind of a callous father would even think of opting for a cushy retirement over the future of his children? I'll tell you what kind: a smart one.
As the Good Dad, you've made countless sacrifices over the years for your kids. Pretty much on a daily basis. But this is one area where you can guiltlessly say, "Me first."
The reason is simple: you can always borrow money to pay for a higher education, but you'll never, ever, ever get a bank to lend you money for retirement. I can see the scenario now:
"Yes, sir, may I help you?"
"You sure can: I need to take out a loan."
"Okay, great. Just let me ask you a few questions. Now, how much would you like to borrow?"
"A million would be good."
"A million? Um, may I ask what you need the money for?"
There are only a few ways to pay for retirement, but there is an abundance of ways to pay for college. 529 plans. Low-cost student loans. Scholarships. Financial aid. Going to a less-expensive school. Heck, tell your kids to get a part-time job - they're young and healthy. You can even (gulp) have them live at home for the first couple years.
Here's another way to look at this whole scenario: if you don't have enough retirement savings, you might be forced to live with your adult kids! (Bigger gulp.)
Now, I'm not saying don't save for college, just be prudent about it and make contributions to both a college fund and your retirement, with your 401(k) and IRA getting top priority. Did you know that the federal financial aid formula does not - I repeat, does not - include the money in your retirement accounts when figuring out how much you can afford to pay for college? See how all this is making sense? Hey, and don't forget, if your company matches your 401(k) contributions, that's free money.
Ruthless? Cold-hearted? Callous? Nope: smart. Be the Good Dad and put yourself first. For once.
Good Dad: "We're set. And so are the kids."
Bad Dad: "We'll be living on the street, but at least Kelsey and Brandon are going to Yale."
(Author's Note: In addition to this chapter, you'll find others with step-by-step instructions on how to perform infant CPR, how to set up a living trust, how much life insurance you should get, why you should never ask your kids how school was (yes, I'm serious), why Good Dads should never, ever get a minivan, and so on and so on. You got your funny stuff, you got your informative stuff. It's ALL useful. Now go out and buy the book already. You'll enjoy it. I promise.)