If you have $100,000 saved for a child’s education, this might only pay for half of an undergraduate degree if no financial award is given. How do you tell your college-bound child, who has been a great and diligent student, that they can’t attend their dream school?
As a parent, this might be one of the most stressful moments that you’ll experience. You’ve worked and saved hard for your child’s college education, but it’s not enough. You consider with your spouse a way to make it work, perhaps working two jobs and turning your entire life upside down to help your child, but it just isn’t possible. You feel frustrated, and your teenager feels devastated and misunderstood, and it causes great emotional conflict within your family.
You are not alone, this problem is very relevant among families now, especially hard-working families who did all the right things to save. The cost of a college education is astronomical, and although there’s no magic formula to help with the money you saved, there are smarter choices you can make with the right form of assistance. At Cordasco Financial Network, we’ve adapted our firm to help make this tense moment an empowering one.
The first time I was confronted with this dilemma was through an email I received from a client at midnight. I intuitively called the couple to help settle them down from what was described as the first big fight they ever had with their daughter. This occurred after she was told that she needed to attend the college that offered scholarship money and had a cheaper tuition. The daughter was devastated.
After settling the couple down over the phone, it challenged me to create better tools to address this situation.
Life is a series of big transitions, and retirement is only one of many that you will be confronted with in your life. Sending your child off to college is a big transition for your child as well as your household, and that’s why having your financial advisor involved in this process can be monumental.
I sent a financial advisor on our team, Tim Joseph, to visit her and her family at a local diner, close to where they live. Tim created an easy to use spreadsheet for the client’s daughter to visualize her life and expenses after college. She was able to see how her college decision, which was her most important decision up to this point in her life, would impact her for years after college. She could see all colleges that accepted her comparatively, and what her life would look like after she graduated.
Tim pointed out that the reason she attended college was to have a working career in which she could live a comfortable life thereafter. If she attended the expensive college, she would need to make many sacrifices in her twenties and thirties in order to make the high student loan payments. This would mean she would have to pick up a second job on the weekends just to make ends meet instead of spending time with her friends. Or, she would have to return to her parent’s house after college before venturing out on her own.
At the diner, the conversation was very educational and helpful. She agreed to visit the college that offered her scholarship money that weekend, and made her decision to attend the affordable school the very next week.
The college decision making process is an exciting event, but it can be scary. However, like all transition processes, from retirement, changing- jobs, moving, a good advisor can create comfort and clarity.
Although we can’t control the rising costs of tuition, there are smarter choices out there to help make this a better experience. Your child, now a young adult, will be venturing into one of the best times in their life! A financial advisor can assist this process with educational tools and experience to help your child with this transition, the same way the advisor helps you with your transition into retirement.
By Steve Cordasco, CEO of Cordasco Financial Network