Getting Parents and Kids to Be Savvy About Paying for College
We can talk about all the issues surrounding the transition from high school to college, from admissions requirements to enrollment trends to the search process, but what most families are thinking about these days is money. How are we going to pay for what can be more than $200,000 for a college education at a private school?
Janet Bodnar wrote a column for Kiplinger's Personal Finance about choosing a college as an economic decision as well as an academic one. In her column, 7 Strategies to Avoid the Student-Debt Trap, she explains the importance of having a frank talk with teens about what their family can afford and what the teens will be expected to contribute. She's an advocate of considering colleges that are a good value and choosing a marketable major.
Bodnar also encourages families to save and pay as they go, as much as they can, to avoid racking up massive debt. With college expenses so high these days, there is no sidestepping the fact that money is a huge factor in choosing a school, and kids need to be part of that discussion.
I've long been a fan of Bodnar's smart, no-nonsense advice when it comes to kids and money. (Full disclosure: Bodnar and I both contributed chapters to a book about raising teens a couple of years ago.) I like how she wants to empower kids to manage their own money, giving teenagers an allowance to pay for everything from their lunches to their own clothes. It may be hard for many parents to give up this control, but in the long run, it can help kids learn to budget and understand limits.
The Washington Post had a good story on Sunday about teaching kids to get in the habit of saving. Managing debt and money indeed starts at home.
Writing about personal finance over the years, as well as education, I too have become a big proponent of teaching kids to be money savvy. It may seem like a bother that you just don't have time for. But it's worth it when you see your children comparison shop and turn down an item because they determine on their own that it's not worth it. Or, when they have pride in the growing ledger in their savings account as they make a deposit at the bank. Soon they are on their own making what you hope are infrequent withdrawals with an ATM card from their hard-earned savings.
If we don't show our kids how to handle their finances, how can we expect them to make ends meet at college and beyond? We have to model smart money management by saving for college and keeping budgets in mind when selecting the best college to attend.