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talking with kids about moneyThe first thing I would like to state as a fact is that sending our kids to college is the “emperor’s new clothes” of our generation.  We have all been socialized to believe that all of our children should go to college and that the type of college was the be all and end all to their future.  Damn the reality of tuition costs, if you are a good parent you will leverage everything to send your kid to the best school possible. Of course in NYC this phenomenon starts before birth with preschool, but I digress.

Then the crash happened and children and their parents had to have difficult discussions about college and tuition.  Or worse…they don’t talk about it at all and it eats away at everyone.  As a family therapist, I have been having this conversation with parents and their children over the past few years and this is new.  The facts are that our generation could “work our way through college,” but that isn’t the reality for most schools right now.  For many years, parents didn’t discuss money with their kids and it was all a mystery as to how it would be dealt with.  Now the real conversations come in different flavors but they can go something like this:

  1. “Mom and I have to write a check for $20,000 this week and you flunked English and got C’s and D’s on your other courses.” (The grades are private unless the parents get their child to sign a release!)   Many parents grapple with the reality that they partied their way through as an undergrad so how can they deny little Suzie the same experience?  But when the cost is over $200,000 to foot the bill, these conversations are happening.  Parents feel guilty and kids feel either their parents are being cheap or they are validated that their parents are the worst/dumbest people on the planet, or they are just making a big deal out of nothing as they always do.
  2. Suzie did well in school but Mom and/or Dad lost their jobs and they may need the tuition money to pay for other things.  For many, they already put child number one through an expensive school and the economy changed everything.
  3. The child is a worrier and is anxious the whole time they are at school that they are ruining the family and the pressure chips away at their ability to focus, so they are afraid to tell their parents that they hate their major or they don’t really want to be an engineer.  Mom and Dad can’t understand why Suzie is depressed.  Suzie privately suffers in silence.

I could go on with examples but the bottom line is you need to talk to your kids about money!!  $200,000 is the same as $2,000 to some adolescents who have only had to pay for the movies or dinner at the pizza place.  Other kids are frightened and depressed about the numbers.

Here are some helpful hints as to how to have this conversation.

1. Don’t put it off!  Have the difficult conversation.  Do it in the afternoon when there aren’t any distractions.  Adolescents can’t access their brain cells before 11am (probably closer to 12 or 1) and adults can’t think straight at night.  Also, make sure no one is hungry.  Blood sugar levels have an effect on our mood.

2. Make sure it’s an introductory conversation.  You didn’t figure this out over night, so, you can’t expect them to digest this in one sitting either. And their reaction will help you with the ultimate answer. Not their first reaction, but their third or fourth or twentieth reaction.

3. Do not preach.  Speak in short sentences and make sure it’s a two way conversation.  And don’t make it “all or nothing.”  WE have a problem and WE need to work it out!  WE need to talk about college, this is a really hard conversation and we won’t finish it today but we need to start.

4. Make sure the child has some “skin in the game.”  I don’t care if you can afford it or not, they should have some responsibility.  It varies from family to family but all kids should have some sense of what they are doing financially.  Use their savings for part of the tuition and if Suzie’s grades improve, she gets it back next semester.

5. Discuss spending money.  Don’t micromanage every nickel but come up with a budget.  Are they on a meal plan or not?  Does it make sense to downsize the meal plan and get grocery money?  She sleeps until noon everyday and doesn’t get to the cafeteria when they serve breakfast or lunch so then she orders out for many meals. Who should pay for that decision?  Did they earn anything this summer?  Did they save or spend it all?  Pick an amount that you both think is reasonable and then let them figure it out. Maybe they need to get a work-study job at school for spending money.

6. Give them a small amount at a time, weekly or monthly.  If you give it all up front and they blow through it, you’re setting everyone up for a problem.   Many parents give their kids a credit card and then blow up when they get the bill and the child spent $100 at CVS.  Or even if they don’t blow up when the parent asks what they purchased at CVS, the student feels like they are being criticized or treated like a child.  Now we are into self-esteem territory!

Remember this is not a skill one develops overnight.  Make a plan and then tweak it.

I have treated many families whose kids got an open amount in college and then the parents are furious at age 23, 24, 25… that they aren’t “off the payroll.”  It’s never too late to have this conversation!

7. Make a plan for the semester with the child and then revisit it each semester, but let it go in between.

8. Once you let it go, buy the school logo for your car, move them in, pick out a good quality school sweatshirt for yourself for the fall and then enjoy this phase of parenting when your job has changed to be a member of the board of directors instead of the Chief Operating Officer.

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