When it comes to kids and money, there are a number of opinions regarding how to best help them get ahead. You want your child to have the best financial start possible, but at the same time you don’t want to enable him or her to the point that he or she remains financially dependent upon you. Plus, many parents feel that there is a lot to be said for teaching children the value of work, rather than giving them everything.
As our children grow, the questions about how much we should do for them shift from those related to allowance and chores , to those related to how much parents should pay for college. While it would be nice to be able to pay for a college degree, many parents can’t afford it. So, it makes sense to prepare teens as early as possible for the possibility that they will have to help shoulder the costs of a higher education.
Ways to Help Your Teen Pay for College
My parents made a deal with me and my siblings: They would pay for housing and a meal plan if we were responsible for our own tuition. Because the expectations were set down early on, I knew that I would be responsible for my tuition. I worked toward getting scholarships, and had my tuition paid for at university. This was one way I could help myself pay for college, without putting the burden on my parents. (Later, I was hired as a resident advisor in the dorms, and paying for housing was no longer an issue for my parents.)
You can also help by encouraging your teen to contribute to a 529 plan . You can contribute, of course, but you can also teach your child the value of saving for his or her own future. Plus, the investment nature of the 529 plan also serves to illustrate the power that prudent investing can have to help your finances. My son knows that, when he reaches his teenage years, a portion of his paycheck will go to the 529 we started for him nearly two years ago. We also encourage him to do well in school, and hope he will try for scholarships. He will be helping to pay for his own future.
Taking Responsibility for Education
One of the reasons I think it is so important for teens to help, in some way, to pay for college, is because taking the responsibility for their education can encourage them to make the most of it. Many students do poorly in college, failing to learn anything, because they don’t have any skin in the game. I noticed, among some of my college friends, that those who had to work to pay for their college valued it more — and didn’t waste as much time.
On top of that, you don’t want to sacrifice your future. Look at your finances. Imperiling your finances to pay for college is likely to be disastrous when you are ready to retire. A popular saying is, “There are loans for college. There are no loans for retirement.” While you don’t want your child to be burdened by debt, it also doesn’t make sense for you to ruin your financial future when your child is likely to be able to pay off modest student loans.
The key is planning ahead. Talk to your children early about saving for school, and get them started working toward the goal early on. You can save up for college as early as possible, and encourage your teen to contribute. This will help protect your finances, create less of a need for student loans, and teach your child responsibility and a degree of self-reliance.