What happens if your high schooler goes to a college or career counsellor’s office? A laundry list of tasks is given to him, including visiting colleges and applying for scholarships. He also has to write the admissions essay.
Is the school counsellor ever asked if they have ever said, “Have an honest conversation with your parents about money?” It is unlikely. It is a good idea to have many important money conversations in high school.
Why is it important to discuss money with college students?
Your life experiences are important. Even if you’re not a money expert, your child can still learn from you. Even if you have made mistakes in the past, don’t be afraid to engage in these conversations.
Convo 1: Explain the process of student loans. It saves you headaches later
Explain to your child that he or she must repay the loan amount plus interest.
If your child is required to take out student loans, money talks student loans will always have a lower interest rate than private loans. Both of you can learn the lingo for student loans (have you ever heard of an origination charge? So your child knows exactly what happens when they take out a loan. Talk about interest rates, repayment plans, grace periods, and other topics.
Are you still unsure? Here are some answers to the most frequently asked questions about student loans. Also, have a candid conversation about your experiences with debt, including how you feel.
Convo 2: Discuss how much you plan on contributing to college
It is possible that you don’t plan on paying anything towards college. You might pay $5,000. The entire bill might be paid by you. It doesn’t matter what, it is best to have a conversation before your senior year. It’s worse than not being on the exact same page.
Your child might assume that you will pay the entire bill. However, if he doesn’t apply for scholarships, work to save, or does not ask for help, he could end up in trouble. For best results, have these conversations early and often.
Not all people are able to save money. It’s okay to discuss it with your child. This is the right time to ensure that your child has a clear understanding of what to expect.
Convo 3: Talk about your child’s earning potential
Your child does not have to go to bed on Saturday mornings. Start earning money towards college. If your child puts in the effort, it’s amazing how much he or she can make for college. It’s not easy work. But, think about it: If your child earns $3,000 in a single summer, over four summers, that’s close enough to $10,000 to put towards college. That’s not something to joke about!
Also Read- Hard Money Loans
Convo 4: Discuss credit cards
Many college students end up in credit card debt. It’s important that your child understands how credit cards work, and how to use them correctly. Teach them about how credit cards can quickly get out of control due to sky-high interest rates.
Here are some tips:
- You might consider adding your child to your credit card account as an authorised user so that your child can build credit.
- You decide the monthly spending limit and your expectations.
- Each month, review each statement together to assess how your child is doing.
- Describe the consequences of spending too little or on the wrong items.
Convo 5: Show your children how college payments work
It is a good idea for your child to have a discussion with an admissions counsellor or financial aid professional at each college. This will help them understand how tuition, fees, and board add up, and how scholarships and other awards work. Discuss how tuition, room and board fees must be paid prior to the start and end of each semester.
You want your child to be ready for the real world. You can get moving by having open conversations about college investments (and how you can work together to make it happen).