Planning for your child’s college education can be an exciting time. Your child is moving on to a new phase in life — one that could dramatically shape their adult future. You are as interested as your child in making the right choice for college. But how do you make sure your child is on-board with college, not only as a potential student, but financially as well?
Part One of this blog series covered the first of 10 Top Tips you can employ to best educate yourself and your child on financially realistic options for a quality college education. Let’s take a look at the next five tips now. In summary, we talked about the wisdom of having family financial review meetings with your child, talking about the total picture of your family’s financial challenges and future goals, reviewing the cost of college with your child, exploring all options for a great college education, and letting your child know what is expected of him/her in paying for their college education. For the full blog post, go here.
Here are the next five tips for great college financial parenting:
Tip #6: Be careful of outside influencers.
Avoid letting teachers, peers, other parents attempt to influence your child by recommending their favorite colleges. Feedback is great, but should be considered as only that. Deciding on a college is important, and ideally your child should be looking to you as a guide and mentor, since you know them best and also know what financial constraints you may have for college costs.
Tip #7: Have your child work up a budget.
Once your child decides on a college, work with them to produce a Year One budget from August to May. Their budget should include all income (grants, loans, parent funding, summer work income) versus all expenses due per month. Is there an excess or shortfall? How will your son or daughter bridge the gap? If they can’t figure this out, perhaps they can’t afford that school and must consider other choices. This exercise is a great way to give them the education and skills to be a financially astute adult.
Tip #8: Have your child keep track of expenses and income.
After they’ve finally been accepted into a college and are starting their first semester, have your child keep track of expenses and income and review after the semester. This financial review should be done along with reviewing grades and classes planned for upcoming semester. Don’t keep investing money if your child is not doing their part by working hard and investing in the ways you’ve agreed to.
Tip #9: Delineate needs from wants.
Be sure your college student knows the difference between needs and wants. “Needs” are books, tuition, and room and board. “Wants” are a smart phone with an expensive data plan, a car, restaurant meals, or Spring Break in the Caribbean. Let your child know the difference, and let he/she work for those extra “wants” or go without.
Tip #10: Let your child pay the bills.
It’s tempting to pay the school bills yourself. However, it’s better to let your son or daughter be responsible to pay the school bills. If your child sees the bills and pays them, he or she has a better understanding of the necessity of paying on time and the consequences of not paying. This is a great life lesson.
These two blog posts cover only a few tips that will help you and your child not only choose the best college for them, but to learn how to be financially responsible – both in the choice of college, and the payment for college once they are in. Involving your child in every stage of the process helps them to take responsibility for their own destiny. It also prepares them to appreciate the expectations and responsibilities that college brings.
Have any other tips you’d like to share? Let us know below.
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