Should parents help their children with college expenses or is it better to let them figure it out for themselves and learn early how to plan, save and manage their own finances, loans, etc.? What is the majority opinion on this, is there one?
There are many ways to pay for your children’s college education expenses. They are felt very strongly by parents and I have heard many different points of views. So that being said, there is no one right way to pay for your children’s college educational expenses, however there are some things that I feel like are really important to do with your children in order to make sure that everybody’s is on the same page.
So it’s a huge concern of mine that students when their seniors in high school are having to make one of the biggest financial decisions of their lives, yet haven’t had much of a financial education to understand what the repercussions are of any of the decisions are that they make. It’s really important that parents step up and teach their children a little bit more about finances and budgeting so that they understand what they’re getting into.
Parents, I believe you need to go ahead and set a budget and terms for how you are going to be able to help your children out. There’s no set amount that I can tell you, you should pay for your children’s college education; but what I will tell you is to be honest and up front, set boundaries and be disciplined at sticking to those boundaries. What I mean by this is to say, “I am willing to give you ten thousand dollars ($10,000) or whatever that amount is and I will give you this money for four (4) years for you to use towards your children’s college education expenses. By doing that children will understand how much their going to receive from you to pay for that education and how much is going to be on them to recover any differences that they have. This will also make your child have to value what that college education is; whether they want to go into debt to get that college education will be on them. Remember it’s very important first to set boundaries on your children, tell them how much they will expect from you and for how long they can expect those payments to go on.
Children need to educate themselves and as parents I think it’s our duty to help educate them on this; what I mean by that is explain to them what a budget looks like, what their budget will look like when their done with college and how much an average paycheck will be when they get out of college. You know if you’re going to come out making fifty thousand dollars ($50,000), how much will you really get every month to pay for all the things that you’ll need to pay for. Then figure out what those student loans are going to be and how much that’s going to cut into their paychecks as well. By doing this everybody will have a better understanding of how much the college education expenses are going to be.
If parent(s) decide to help their child with college tuition and/or expenses is it wise to create some type of contract between the parent(s) and child stipulating what they, the parents, are willing to contribute and what their child should be accountable for?
In my opinion, the hardest thing to do is to say no to your children. It’s especially hard when it comes to things that cost more money than you can afford. I have found throughout my kids’ lives, that if I give them a generous allowance per month, and tell them it is to pay for all the things they want but don’t need, they don’t ask me for much. I’ve set boundaries on what I will give, and they’ve learned to live within that budget and to save up for the costlier items they really want. You can do the same when it comes to college expenses. By creating a College Expense Worksheet and Agreement, you will be helping your child understand the expenses at hand; what is their responsibility and what’s yours; as well as a way to understand what a budget is. This is a great idea to teach your children accountability before they are on their own in the real world.