Rather than focus on the "whys" of this finding, this is a great opportunity to talk to your current or prospective college student about the financial investment of a higher education. If parents simply "write the checks", they are missing an important learning moment. Money is mostly invisible to today's generation that deals in gift cards, digital wallets and plastic. The realization that cash is our form of currency is truly an after-thought. Here are some tips for getting that financial conversation going:
- be up front about the cost of tuition and room and board. Compare it to something tangible. For example, "The amount of money we will be paying for your first year of college is nearly equal to the cost of both of our cars. After we re-buy both the cars this year, we have to do it again three more times so you can graduate from college."
- talk about what, and how much, you are willing to pay for this education. Be up-front about any costs they are expected to pay. For example, some students are responsible to cover the cost of textbooks. This is a great incentive for students to seek out bargains at places like Chegg, Amazon or Half.com.
- discuss the covert costs of college with your student so they are aware that tuition and room and board are only part of their education investment.
- if your student will be responsible for paying back any loans, consider putting that in writing to give them the chance to sign a contract and to feel the obligations of that contract.
- be clear about spending money. Are you giving your student an "allowance"? If so, are there any strings attached, such as "this money may not be used to take your girlfriend to a fancy restaurant"? If parents expect students to earn their own spending money, give them plenty of notice.
- make sure your student is aware of the many credit card offers they are about to receive. Share your credit card statement with them to point out the box that shows how much you will pay if you only pay the minimum each month. College is expensive enough without racking up credit card debt.
- besides credit card chats, engage in talks about budgeting and bank account fees.
Learning about money is just another part of your child's education. Don't miss out on this chance.