At what point should we be talking to our child about college finances and how/if we parents will contribute to college expenses?
Start this conversation early. Will you be willing to take out a loan for your child’s expenses? If so, what are the parameters of the loan? When does repayment begin? Will you be willing to co-sign on a loan for your child? Your student should be aware of your plans before they apply to college.
This is an important discussion families should have.
From the Moms
Tip #1: “We started a 529 when our student was born and contributed $100 a month every month. We explained to him that we had a set amount of $$ we could contribute, but that he would have to save spending money and contribute anything over the top of what we had saved. We strongly encouraged working before and while at college.”
Tip #2: It’s hard to look at your child as an adult, but when they get to college they will be. So you have to sit down and have an open, honest conversation about money, what you expect grade-wise for the money you are spending, the scholarships you expect them to earn and keep. Show them the money in the college account if you have one then pull up the school info on tuition, housing, meals, books and spending money. Make it real for them. Our student knows that if she doesn’t keep her scholarships, the money will be gone by junior year and she will have to get loans that she will have to repay. We discussed those payments and how the interest works and how long it takes to pay those loans back.
Tip #3: “We began talking about finances fairly early, but we did not limit where our son could consider applying. We explained to our son that we committed a set amount of money per year for his college expenses, and beyond that, he would need to contribute. That fact played a role in where he ultimately decided to go — he was willing to have some “skin in the game” but he did not want lifelong debt.”
We have numerous article dedicated to college prep on our website! Keep reading here.
