Last week, we discussed what it means to be a member of the Sandwich Generation, those adults who are responsible for bringing up their own children and for the care of their aging parents. We discussed how hard it can be to navigate caring for two very different generations without risking your relationships, finances, or sanity.
Today, we are going to talk about the younger generation, the bottom bread in the sandwich. While strollers and soccer clubs can be pretty spendy, for most parents their greatest financial burden comes when it’s time for their kids to go to college. This is where many parents really mess up their finances and put their own futures at risk.
We said before that how to survive as a member of the sandwich generation is to get your own life in order, then understand your options, set clear expectations and boundaries, and make a plan. This is how each of those steps will look like as they relate to your kids and college:
Understand Your Options
Our current student loan crisis is evidence that when it comes to college, most people just follow the crowd instead of evaluating their options. Not everyone has to go to a 4-year university to have a successful and fulfilling career. Real estate agents and electricians would tell you that. A lot of pastors don’t have degrees and are just doing fine, too.
Even if your child needs a degree for their chosen field, there are a number of affordable options. Community college is a great option, one that Steve Jobs, Walt Disney, and George Lucas all took advantage of. There’s no shame in community college. And it’s a great bargain.
There are some much lesser-known ways of earning credit that will count towards a degree as well. Advanced Placement courses allow high schoolers to gain credit through exams. A number of credit-by-exam programs exist that allow people of any age to do the same. I tell you all about them in this post here. And what about a trade school or the military?
Set Clear Expectations And Boundaries
A lot of people don’t talk openly with their kids about money, and I think that’s a big mistake.
Don’t be embarrassed to tell your kids what you can and can’t afford to do for them. It probably won’t be a surprise to them, unless you have a secret college fund that’s been growing for years.
When it comes to college, a huge factor in the final cost is school choice. Your kids don’t have to go to a private school that they can’t afford when a state school offers the same education. Before they even start applying, sit them down and explain the financial implications of the different schools that interest them.
If they insist on applying to a private or out-of-state school, show them what their debt burden would be, how long they would be paying for it after graduation, and how it might affect their life choices, like what jobs they can take and when to have children. Let them know if and when you are willing to take on debt for them and who would be expected to pay it back. (Remember, if you take out a loan or co-sign for one, you are legally responsible to pay it back, no matter what your kid promised you.)
Make sure your kids know if there are any strings attached to your financial aid. Do you expect them to earn certain grades? Maintain a certain kind of lifestyle? Hold a job? It’s ok to have conditions. It’s your money, after all, not theirs. They have no right to it, it’s a gift.
What about after school? A lot of parents are still supporting their kids after graduation these days. Is that something you’re willing to do, and if so, to what extent? Are they welcome back home, and if so, will they be expected to pay rent? How many hours will you expect them to be working compared to playing video games? Don’t think they won’t come back. In 2012, almost half of parents age 40 – 59 were providing support for an adult child.
Knowing what to expect (and what not to expect) financially from you will help your kids make wise decisions about their futures. Hopefully. At least they can’t say you didn’t warn them.
Make A Plan (Or Two Or Three)
If you can afford it, start saving for your kids’ college. Or make a plan for what you can do to be able to start saving.
In addition, help them earn scholarships to help pay for college. Start working with them on their grades, extra-curricular activities and SAT preparation. Teach them how to research scholarships and coach them through the essay writing process. I got a scholarship through my union while working at a grocery store. Maybe they should get a job bagging groceries and do the same.
Even without scholarship potential, a job is a good idea. Have your teen start working to save for college and begin learning to manage money under your direction. Honestly, their work ethic and money management skills will have a much greater impact on their future financial success than which college they attend.
And don’t just plan for a 4-year Bachelor’s degree. Map out the cost of an extra semester or two of school or graduate school, and show them how that will affect their finances.
Don’t forget to think about their inevitable job search! A great education will be useless if they haven’t developed the skills necessary to get and keep a job. And isn’t that one of the main purposes of going to college in the first place?
Coming Next Week…
It’s hard being sandwiched between two generations that are competing for your time, attention, and money. Now that you know what to do with your kids to prepare, it’s time to address your parents.
Parents can be even more challenging. At least your kids are used to you bossing them around, that’s how it’s been their entire lives. With your parents it’s different. You used to depend on them. You have a delicate balancing act to perform for a peaceful transition into them depending on you. Next week we’ll dig into the details.