Talking about college and money has probably edged out sex and drugs on the list of conversations parents LEAST want to have with their teenager. Maybe it’s because there’s no marketing campaign to go with it. So consider this a start toward that end. Parents, have the conversation with your kids about college and money!

college money conversation

Avoiding college planning pitfalls means being willing to have the challenging conversation about college and money, who pays for what and when.

Why do families avoid having the college money conversation? Lots of reasons based on my experience with hundreds upon hundreds of college-bound families.

First off, no one really knows what it will cost. We’ve all heard scary news stories about skyrocketing college costs, but we avoid getting to the bottom of what we’re really talking about here. Is it a hundred grand, or a quarter of a million dollars? How much will merit aid lower the cost? What financial aid might we be eligible for? Families are afraid to have the money talk because they feel completely inept and unprepared.

The people who determine college pricing go to great lengths to prevent you from feeling any sort of comfort about, or command of, the final price. Tuition may be $25,000/year, but you really have no idea what you will pay with everything thrown in. In fairness, great strides have been made by institutions of higher learning (with considerable arm twisting from the federal government) to get you a ballpark figure earlier in the process, using tools such as net price calculators.

In its Trends in College Pricing 2014, the College Board reported that the average estimated budget (often called Cost of Attendance) for an in-state public university is $23,410 for the 2014-15 academic year. For a private non-profit four-year college that number is $46,272.

I have heard the following phrases more than once from intelligent, well-meaning, loving parents to their children:

  • Don’t worry about college costs.
  • We’ll help you however we can.
  • We’ll talk about this later, when the time is right.

A friend once told me she didn’t think it was any of her children’s business what she and her husband were doing to prepare for college expenses, because their financials matters are private. I agree that my kids don’t need to know what we have saved for retirement or how much we earn, but I do believe it is in the best interests of all involved to be transparent about expectations and responsibilities.

One of the most common conversations I have with the families I work with revolves around college costs. So many factors go into what college will cost, not the least of which is which school you choose. We start by breaking down misperceptions, such as “public institutions will always be cheaper than private” (not true), and “we’ll never get any aid, so I’m not even going to fill out the FAFSA”. (Big mistake!) Step by step, we eat the elephant a bite at a time, and examine it for what it really is: a super huge investment that will pay big dividends, if it’s done right.

When it comes to college and money, who pays for what and when?

saving for college decisionsOn or before your child’s 12th birthday, please have this conversation:

“We think it’s important for you to go to college, or at least consider the options you have. So here’s what we’re going to do to help…”

If your child’s older than 12, don’t panic. But have the conversation. SOON.

The answer to this question is incredibly personal. THERE ARE NO WRONG ANSWERS. Don’t avoid having the conversation because of what you assume “most families are doing” or because of your discomfort with what you’re able to do (or unable to do) as a parent to contribute to college costs.

When our oldest son was a toddler, my dear wife and I had a series of conversations about our respective philosophies about paying for our sons’ college education. We had two different philosophies within the same household! My wife insisted we pay for the entire cost of college, including room and board and incidental expenses, because this is what her parents had lovingly and generously done for her.

Then we faced facts about how college costs have changed in the past two decades. And we openly acknowledged that we started having children later in life than her parents, putting us that much closer to retirement, another expensive investment to prepare for.

I then shared my personal feelings that our two sons should have some skin in the game.

Through a lot of dialogue between us, some of it pretty tense, other conversations merely intense, we arrived at a unified position that we could then share with conviction and in detail with our two sons, in plenty of time for them to make their own preparations to put up their share of the costs, or at least make a dent in the first couple of years.

If you ask my boys how much they need to save for college, my older son, who’ll be a college freshman this fall, knows the number to the five-spot. And my younger son, a freshman in high school, at least has a solid idea. He knows what his responsibilities will be, what we’re covering, and a pretty good dollar-amount estimate for each chunk.

Families that fail to address the question of “Who pays for what and when?” risk the collateral damage that is caused by poor communication and the poor planning it leaves in its wake.

Talk openly about college and money and who pays for what and when.

Who. What. When. None of these variables is optional.

Some options could look like this:

  1. “Mom and I will pay for all tuition, fees and books at an in-state public university. Everything beyond that is yours.”
  2. “We will contribute $30,000 per year for four years. If you go somewhere more expensive or take more than four years, you’re responsible for the balance. And no, we will not ‘refund the difference’ if you graduate in three and a half years or choose a very inexpensive option.”
  3. “It’s 50-50 all the way.”
  4. “We’ll pay for everything, but we want you to work at least ten hours per week during college, so you learn how to manage your time, just like in the real world. You can keep what you earn, but you have to work.”

What you’re doing is creating a contract. And it’s acceptable to include a performance clause such as maintaining a 3.0 and making progress towards a degree. Whether or not you put this onto paper is up to you, but the basic premise of “If I do this, I expect you to do that” will go a long way toward eliminating surprises.

Okay, now it’s college money conversation homework time.

college planning critical questions

A Free Guide to Avoid pitfalls like NOT having the college money conversation, plus 5 other Critical Questions and answers.

In your situation, who pays for what & when? Be prepared for open (and at times uncomfortable) dialogue about your desired “contract” and especially the values you hope it conveys to both student and parents (i.e., sharing in the sacrifice, providing the student with ample options, making sure your family can also cover the cost of other family priorities, etc.)


This content is an excerpt from a FREE GUIDE I wrote for parents with college-bound students, called “6 Critical Questions To Avoid Common Pitfalls When Planning for College.” Download the entire guide and get all 6 questions and answers. It’s my gift to you, and I believe you’ll find value in it.

If you’d like help with the college money conversation, or other college topics like ACT test prep, college applications guidance, merit aid, finding the right college and more, Schedule A Free Consult. Let’s get the college conversation started.