Should I Save for My Child’s Future… or Get Out of Debt First?

What if the right financial decision still feels wrong? What if doing the responsible thing for your child's future means delaying your own financial freedom?Have you ever felt pulled in two different directions, knowing that both matter but not knowing which one comes first? Do you keep saving for your child's future or do you focus on getting out of debt that's quietly costing you every single month?Because either choice can feel like you're sacrificing something important. Well, if you've been carrying that weight of that tension today, we're going to walk through it with clarity and wisdom.A very practical show on the way today. Hey, friend, Ralph Estep Jr. Here.Welcome to Financially Confident Christian, where my goal is to help you break that cycle of financial shame with confidence. Now we got a voicemail today that is really going to knock your socks off. And it's really a deeper question. The big question is this.Should I save for college or pay down my home equity line of credit first? But when you hear this question, you're going to know it gets a little deeper than that. Well, let's get right to today's question.

Hi Ralph, I started listening to your show last month and I'm really enjoying the episodes you put out. I've been working hard to get my finances in order.I make a strong income and over the past year I've built actual systems so my money isn't just disappearing. But here's the problem. I've got a HELOC for $461,000 at 8.5% interest. That's costing me about $3,500 a month just in interest every single month.My son starts college in September. I didn't have a fund for him, so I set aside $64,000 in a high yield savings account for his first year.Since January, I've been putting $2,000 a month into a 529 for him and my daughter. She starts college in four years. I'm also investing about $5,000 a month. So here's what I'm wrestling with.Do I keep going as I am and just live with the HELOC interest bleeding me $3,500 a month, or do I take $80,000 and pay down the HELOC? That would save me about $1,000 a month, but then I'm pulling from somewhere else. I'm not sure how to prioritize this. What's the right move?

Well, friend, first thing I want to acknowledge is this. You've done a ton of things right. You've done a lot of things that I talk about on this show all the time correctly.You've built structure that's fantastic. You've created margin for yourself. And bigger than all those things, you're thinking ahead. And this isn't a situation of being behind.This is actually a situation of deciding wisely what comes next. You're being very strategic.And what you're really asking is you've got two priorities that both matter and wisdom is about sequencing, not choosing one forever. So let's get right into the nitty gritty of this and talk about what you've asked me. You've got to recognize the weight of your interest rate.You Talked about an 8.5% home equity line of credit. That's a big number. First thing I want to say to you, you might consider refinancing that rates have come down a little bit right now.You might be able to reduce that interest rate. But here's the thing you've already alluded to that interest is consistent. You said, I'm paying this every month. It's guaranteed.And yes, it's working against you every month. And if you paid it off, guess what would happen? You'd have a guaranteed return of 8.5%. That's hard to match with low risk options.But you do have some ideas here. But let's acknowledge what you've already done for college, because that's what you've asked me about specifically.I want to pause here because it matters. You've already said to me that you funded $64,000 in your son's first year. Listen, that's huge. I don't know where your son's going to college.Maybe that's only a one year tuition, maybe it's two. But. But you've done something. You've started the 529 plan. You're thinking ahead.You're paying for your son and your daughter who you said goes to college in four years. And you're contributing to it consistently. Friend, that's not neglect.You're doing a lot of right things, you're doing strong things and you're doing intentional things. So let's get into it. You got to understand the opportunity cost. You got $80,000. It's parked. If you leave that $80,000 in place, you got flexibility.You can use that for other things.Now, of course, if you continue paying high interest by doing that, but if you apply it to the home equity line of credit, you do reduce your monthly pressure. Like you said, you're going to free up about $1,000 a month. And yes, you're going to improve your long term cash flow.But this comes to be trade off here. There's an obvious trade off. You lose your liquidity, you're not going to have that money to be able to pivot.What happens if I don't know what your other situations are? That's the problem with these voicemails. I don't know exactly everything that's going on in your world, but you are going to lose some liquidity.And that reduces pressure later, of course, because you don't have that mortgage anymore, you don't have that home equity line of credit.But like I said, one thing I think you've missed here is you might be able to refinance it, but you've got to think in terms of cash flow, not just balances. And here's a shift I want you to think about. You said to me you'd have an extra thousand dollars a month. What does that really mean to you?What would you do with that? Does it give you more flexibility? I can do this, I can do that. Does it give you more margin?I actually think what you do is it would give you more ability to keep investing in savings because honestly, you are an investor and you're a saver. That's a fantastic thing.Cash flow is what a lot of people don't think about, but cash flow is what sustains your plan, not just the account balances. So here's my advice for you. I want you to consider a balanced move forward. It doesn't have to be an all or nothing.And that's the thing I hear in your question. You're like, Ralph, I could do this or I can do this. No, there is beauty to this. You could do about 15 different things.Maybe right now you take a portion of that $80,000 and pay down that home equity line of credit, but not pay at all. That way you've got some liquidity for peace of mind and then you continue those steady contributions to the 529 plan.Again, I don't know the specifics of how much the tuition is going to cost, but here's the thing. Don't beat yourself up. So many people get trapped in this perfection goal. Your goal isn't perfection. It's stability that lasts.And friend, you're doing a lot of those things. But I want to go a little deeper here. Decisions like this can feel heavy. I can feel the heaviness in your voice. I love the fact.And you're showing so much love to your children. You're trying to do the right thing by your family. You're trying to be wise.And I can just sense the pressure that's all around you and that can continue to build up if you're not careful. But here's the thing, friend. God isn't asking you to carry that weight alone. That's the thing. It's so easy to get stuck on.Well, I just got to figure this all out. No, you don't. God is there to help you. God gives us all wisdom to make decisions like this right in the middle of this.So I just want to encourage you right now, maybe you need to pray a little bit and maybe ask God to help you prioritize these things. Well, hey, it's okay to say to God, listen, I'm confused here, God, I'm not sure what I should do.You know, guide me in what matters most right now in the season that you're in. But I want you to hear this and I want you to hear this loud and clear. You are not behind, my friend.I just feel like you're being refined in how you lead your finances, and that's a great place to be. So here's your win for today. I mentioned this a little while ago. It's time to choose your sequence.What I mean by that is right now I want you to write down this. What do you want to do? Right now I'm going to prioritize whatever that is, whatever you think is important.But you're going to continue to support the other thing. I want you to write it down. So maybe right now you prioritize. I want to get out of debt. So you are very aggressive in paying off debt.You're investing a lot of money every month, so maybe you just need to more pay more on that mortgage instead of just making that simple $1,000 payment. Maybe you have a blended approach because you sense it already. You're trying to support your kids and you're trying to support yourself.And this is hard. This is hard as a parent, but I want to encourage you to write that down because that clarity is going to reduce the second guessing.You seem to me like somebody that's going to second guess yourself. So write it down and be clear about it, pray about it, and set that goal to move forward. Well, let's get into the Bible.Today we're going to go to the book of Ecclesiastes, chapter 3, verse 1. There is a time for everything and a season for every activity under the heavens. Now you might be saying, ralph, wait a minute.That's a stretch, dude. But here's the thing. I think it doesn't. It's not a stretch. Financial wisdom often comes down to recognizing what needs your focus. In this season.You've said it. Right now my season is I want to put my kids through college. Real pet peeve ran of Ralph's.So many kids are going into their first career weighted down in student loan debt. So I love the fact that you're trying to help your kids not be in that position. I think that is admirable.And this season of your life, it might mean, yeah, I'm going to carry a little debt because I see the value to my kids in the future. So just realize that this is a season of your life and maybe right now your focus is on your kids.You want to get them started without that heavy burden of student loan debt. How about we pray together right now?Heavenly Father, I lift up my friend who's carrying the responsibility of providing and planning well for their family. And Lord, you see their heart, you see their effort and you see the decisions in front of them.So Lord, right now I ask that you would give them wisdom to prioritize their life with confidence.And Lord, as much as you can, help them to not feel torn, but to really feel guided in their decisions, I ask that you would bring peace to their mind, Lord, clarity to their next step and assurance, Lord, that you are with them even in this process. Lord, I just ask that you would strengthen all of us as we try to lead our families well. And we ask this in Jesus name. Amen, friend.You don't have to do everything at once. Just do the right thing for this season in your life.And maybe right now, as you're listening or you're watching this, you're unsure what deserves your focus in this season in your life. And you could really use some help with that. I would love to help you in this season of your life.You can send me your question by going to financiallyconfidentchristian.com/question We'll put a link in the show notes. You just click that link and just tell me what's going on. But again, go to financiallyconfidentchristian.com/questionI want to thank you so much for joining me today. As I always say, stay financially savvy, live in this season right now, make the best decision for you.May God bless you and you have a truly great day today.