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by Paula Wheeler

College is often one of the most sizable investments a family can make. While it can be hard for parents and kids to talk frankly about finances, parents who can get past the discomfort will find that having “the money talk” early in the college search and application process helps reduce uncertainty and stress, for them and for their college-bound offspring.

Families that sidestep the subject of money until admission decisions come in could be setting everyone up for some serious heartache. No student admitted to their favorite school wants to hear, “I’m proud that you got in, but we can’t pay to send you there.” No family wants to be cash-strapped for four or more years from trying to finance an education that doesn’t really fit their budget. No college grad wants to be saddled with massive debt.

So get ready to have the talk! Here’s how:

Determine your max. Based on your income, expenses, savings, the advice of your financial advisor and any strong feelings you may have about getting a good value, figure out what you can – and are willing – to pay.  A specific number for four years of college may be the most helpful, but don’t forget to discuss graduate school as well. That’s often an unknown at this point, but if you won’t be financing it, be clear to your child up front. 

Establish their expected contributions. Do you want your child to have some “skin in the game” when it comes to their college education? If so, decide what you are comfortable with. Are you ok with them taking out a certain amount of loans, or do you expect them to earn and pay their contribution as they go along, with earnings from a part-time job or full-time summer work? Will you cover tuition, room, board, fees and materials, and they will be responsible for personal expenses and fun money?

Prioritize financial fit. If the college is an academic and social fit for your student, but you and they cannot pay the cost without going into an unacceptable level of debt, that school isn’t a true fit. Your student will need to understand that all three elements are equally important.

Prepare some real-world scenarios to talk through. Most high-schoolers can’t conceive of being financially independent, let alone budget for it. Come up with some simple scenarios to help illustrate their potential post-college circumstances. What would they need to cover rent, food, transportation, other bills and a monthly student loan payment in the city or town you now live in? What would they need to earn to have enough that they could also save some money?

When you’re ready, make an appointment for the talk, and honor it like you would a client meeting! Communicate everything to your student without drama or apology, and ask them what questions they have for you. Remind yourself that although this may feel uncomfortable, having an honest and transparent discussion now will create clarity and focus for the college search and a practical basis for making decisions when the admissions and financial offers roll in. Plus, you’ll be teaching your child an invaluable life lesson!

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