$20k by 18 - part 5 (Finishing well)

While teenage years bring with them a host of challenges and emotions previously unseen in parenting younger kids, it also brings some of the greatest joys and hopes. Dreaming and planning alongside our teens has brought some of the sweetest memories from my parenting years.

Dream big, but dream realistically

Every achievable dream requires some hard conversations as well.

Many questions to answer as we work together to set them off to college successfully:

How much does it cost?
What can we expect from FAFSA?
How can we afford it?
Who pays for what?
What college?
What major?
What needs to be done now to make it happen?
Where do we turn for advice?
What should I do with my life?
Is college right for me?
Community college or four year?

And so on.

No wonder we are all emotional basket-cases so much of the time throughout this season. I seriously think much of the stress attributed to raising teens is because we are as much an emotional wreck as our child. Major transitions never pass without some hiccups. The last couple years of high school are the times to really dig into these questions together and tackle the issues and challenges as a team. Shoot for the stars, but the best way to get there is with a well drawn map.

Dreams will require some work, and we carefully thought about what we needed to do to help our kids achieve their dreams for adulthood. While this might not be an exhaustive list, these are some steps that can help that older teen prepare well for the financial burden of college or adulthood.

Talk about expenses

This conversation usually starts with a jaw drop. How can anyone afford THAT? Why does college cost ten times more than it did when I went there? Yes, the sticker shock of college is not easy to recover from. Students should also come into this with their eyes wide open. We are talking about A LOT of money.

Sometimes this conversation involves some serious transparency on the part of parents. Show teens what it really costs to run a household. Obviously, they will not be jumping right into your financial needs with multiple vehicles, dependents, and retirement closer than we care to admit, but they can appreciate the sting of utilities, taxes, housing expenses, and handling emergencies.

Mostly, this conversation involves a serious look at college related expenses. Pull up a few schools from their short list and add up the cost for a semester (keeping in mind the total cost is that times eight). With some of our kids, we started a spread sheet as it was a little complicated to keep all the costs straight as the scholarships fluctuate based on grades and test scores.

If you have not already, now is a fitting time to talk about who will pay for what. This conversation should first start with the parents determining together what they can afford and are willing to pay for their child. From there, the teen needs to have a clear understanding of how much of the expenses will fall to them.

This can be a serious wake up call (for both parents and students). I cringe when I hear of parents sinking themselves into debt or over-committing themselves to the first of many children as college approaches. This is the perfect opportunity to model to your kids how we make hard decisions and weigh our resources before committing.

We realized before our oldest went off to college that we would have kids in college for the next 17 years, and most years we would have two, or even three(!) kids in school in any given year. That means that we cannot just drain our bank account for the first child or tighten the belt for a couple years. We had to carefully weigh what we could pull out of savings, what we could expect our budget to dip as kids moved out (fewer groceries, lower utilities, etc.), and even how we might safely expect our income to change (hopefully increase) in the next few years. I believe we do our kids a big disservice by heavily borrowing from our retirement accounts or taking on loans to pay for their schooling. This takes away their ownership of their future and potentially sets us up for a strained financial situation that could potentially burden them emotionally in the future as well. They need to own their education. While we paid everything of their high school expenses, college brings their first step to owning their future. We are happy to help with it, but it rests on them to figure out how much they need and how to meet that need. 

Make a budget

Once you have a realistic view of the expenses, it is time to make out a  budget. This might not be followed strictly as the months go by, but this will also help provide a black and white picture of their financial state. Include realistic income, tuition, room and board, spending money, books, transportation, etc. Then, again figure out who pays for what, working a little more detail into your plan. Maybe the parents will pay room and board and transportation and kids pay everything else. Maybe you split it all down the middle. Maybe parents pay a fixed amount and kids take the rest. Maybe you will make a plan and change it part way through. That's okay, too.

We set the amount we would pay, but sometimes we would also help with books, or place a little Amazon order as they went off to school to help with some of their incidentals at the beginning of the year. It is fun to be able to send them little treats and surprises (essential and non-essential)  knowing that they have weighed the cost and everything is such a blessing to them in that season. And, we can do this as we can afford it, not when we are already stretched as thin as possible.

Take a finance course together

While we never did this formally, we did a lot of research and talked about money and budgets all throughout their growing up years and within the context of college. There are some solid financial courses out there that can really help your child start their adult years on steady financial footing.

Live by example

As in most areas, financial habits are better caught than taught. We cannot go back and change the past, but we have an opportunity to reset our own finances and avoid heading into debt (or more debt) to "help" them out. Set a realistic budget. Stick with it. Revise it each year as needed. Be open about what you can really afford. Love them enough to let them learn some hard lessons.

Parenting kids as they head off to college is so much harder in ways I had not anticipated when our house was full of single digit children. Just like any season, I wish I could slow it down and enjoy each day of it to the full, but instead we hold tight and fly with it. And, we stay planted on our knees as we pray for them more sincerely and passionately than ever before.