It may just be the biggest expense of your life. Meanwhile, it’s the biggest four years of your kids’ lives. (Or so they see it.) So how do you sit down and calmly have the talk about paying for college?
First, know there are many schools they can choose from and many ways you can pay for a higher education. We’ll walk you through the process step-by-step to help you make the right choice for your finances and your family.
We spoke with Suzanna de Baca, VP of Wealth Strategies at Ameriprise Financial, to find out how she counsels parents. Read on to get some sage advice on how to not only choose a college now but how to set your children up for financial and career success later.
1. Start Early and Honestly
“A candid conversation with your kid about paying for college needs to start as early as possible,” de Baca says. That can even be as early as middle school. It can save you and your kid a lot of grief to set expectations early, instead of bursting her UNC-blue bubble right before she applies.
“If your kid is excited about or set on attending school outside your price range, have a conversation about whether that is realistic and what you as a family can do to make that happen,” de Baca says. It might not be as simple as saying no, because there are other ways to pay for college than with a 529 plan. We’ll get to more on that, below.
Paying for college is a huge financial commitment, which is why you should get help from someone who is well-versed in financial planning. Friends or family who have already sent a child or two through college could provide some tips, but they won’t be familiar with your financial situation. De Baca suggests working with a financial adviser, financial aid counselor or guidance counselor or even talking with your accountant and attorney.
Just remember that school counselors aren’t necessarily trained in matters of money. “They may have a lot of experience in planning for and selecting a college, but depending on their background, they may or may not give you good financial advice,” de Baca warns.