How to speak to your child about your college budget - Nancy McKenna ––

How to speak to your child about your college budget

have you had "the talk" with your teen yet? The one about your college budget?

When you were a child, your parents probably didn’t talk to you much about your college budget. That’s likely because college used to cost a whole lot less, and that difference has little to do with inflation.

For instance, take the average amount that public college students paid for the 1987–88 school year. When adjusted for inflation, those students would have paid $3,190 in 2017.

As tuition continues to go up, it’s more important than ever before to talk to your child about his or her college budget. 

You just need to know when to do it and what you should discuss. Get the skinny so you’ll be ready to have the talk with your college-bound child.

How Much Can You Afford?

More than 70 percent of students took out loans of the 2017–18 academic year. Those loans came out to an average of $37,172 per student, and that was just for one year. Imagine that going on for four years.

Don’t let your child fall into the student debt trap. Instead of taking out loans, look at how much you can reasonably afford to pay out of pocket. If you are unsure of how much you can afford, sign up for a virtual workshop to get the tools you need to figure out how much you can spend on college. This will give you the perfect starting point for talking to your child.

When to Have the Talk

Once you know how much you can afford, it will be time to have the talk. Some parents try to put off having the talk as long as possible, but that can lead to a lot of anger and confusion. Kids get their expectations up, and the closer they get to college, the higher those expectations will be if you fail to manage them. That’s why it’s important to talk to your child early.

By the time your child is in middle school, he or she is ready for the talk. Let your child know how much you can reasonably afford for school, so he or she can plan accordingly. For example, if that quaint little private school is out of the question, let your kid know right off the bat. Then, he or she will have a realistic view of what to expect after graduating from high school. Once you are on the same page, it will be so much easier to make the transition from high school to college.

Community College Is a Viable Option

Your child will likely want to go to a four-year university right away. It’s normal to want to start at a university, but community college is often the right decision. That’s especially true if you’re committed to staying out of debt.

Tuition at community colleges is often thousands of dollars less than it is at a four-year university. Your child can also save money on room and board since he or she can live at home while attending community college.

Then, at the end of the two years, your child can transfer to a four-year school. That way, you’ll only have to pay for two expensive years of college.

Let Your Kid Add to the Kitty

When you have the talk with your child, he or she might not be happy with the budget. Your child might have dreams of going to a more expensive college. Remind your child that he or she has some control over the process. Your kid can always add to the college budget by getting a job.

You do need to approach this carefully. A study published in the American Educational Research Journal found a correlation between working long hours and reduced academic performance. Long hours can also lead to negative behaviors and other issues.

Of course, allowing your son or daughter to get a summer job is a lot different than letting him or her work 20 hours a week during the school year. Come up with ground rules before you let your child get a job. Then, monitor his or her performance outside of work to make sure it isn’t interfering with anything.

Jobs aren’t just for high school, either. Your child can continue to work while in college. That will allow you to add to the college budget since you won’t have to pay for his or her living expenses.

Start Prioritizing

You can also change some of your own behaviors to help add to the college budget. For instance, you might want to buy a new car this year, but what if you waited? How much more could you add to the budget?

Write down a list of everything you want and need, and then prioritize it. Hold off on big-ticket items until you get your son or daughter through college. That’ll make your life much easier. Then, when he or she graduates from college, you can make yourself the priority once again.

The Bottom Line – Avoid Debt at All Costs

As a parent, it is your job to get your child through college without accumulating any debt. Students who take on lots of debt are more likely to have financial and relationship issues down the road. In fact, 1 in 8 divorces is a result of student debt. That’s a staggering statistic, and it should tell you everything you need to know about student loans.

You can keep your child out of debt by determining how much money you have to spend and then having the talk. Set expectations early and reinforce them often. Also, explain why student debt is so dangerous.

The more you educate and inform your child, the less likely he or she is to take on crippling debt. Then, you will have the satisfaction of knowing you helped your child make it through college without taking on debt.

About the Author Nancy McKenna

I'm a personal finance geek. A real estate investor. An accountant, a single mother. And I'm going to get my kids through college without student debt! Will you?

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