*Our Emotional Relationship with Money
In my secret life as a Higher Education administrator who leads a team that includes our financial aid office, I have many opportunities to talk with parents going through the college search process with their kids. In any year it can be a stressful process, and this year, because of the delays caused by the FAFSA simplification process, it is even more stressful. I always try to bring more joy to the process, and help families take a deep breath and let the process unfold.
I share with parents my own experiences going through the process. Denise and I had 3 kids in 3 1/2 years, so we not only had three kids in diapers for a while, but we also had three kids in college at the same time. It's hard to believe that I do strategic planning for a living, isn't it? Truthfully, we were married young, had our oldest child before we graduated college and the second before finishing grad school. We were always the youngest parents in the room when our oldest went through her college search and were frequently still the youngest parents in the room when our youngest child went through her college search. All of that is to say, I understand being worried about affording the right college for your student.
I like to ask parents to spend a little time considering their emotional relationship with money. it's important to understand how we feel about money because that will impact how we feel about paying for college. Do you feel better getting a $100 shirt for $50, or about getting what you want at full price for only $45? My kids thought I was cheap for buying my blue jeans from Dollar General. Do you think value and cost are intricately twined together or are they opposites? No answer is the correct answer to these questions, it's about becoming self-aware. While affordability is a key part of college fit, I want parents to be able to keep their emotional relationship with money out of the decision.
Why do I care? We have significant research that shows that families make irrational (i.e. emotional) decisions about college cost that unknowingly impact their financial bottom line. For example, our research shows that parents and students --who say affordability is key to their decision-- will choose a more expensive college that offers them a bigger scholarship even though their out-of-pocket costs are higher than the 'second choice' college. They feel like the bigger scholarship means the college values their student more highly, when in fact the scholarship is based on the higher price. In other words, many parents like bragging about how much their kid's college costs and how much money they are saving because that kid earned a scholarship. They are meeting an emotional need, not achieving their goal of finding the most affordable college. The reverse happens as well: picking the least expensive school even when it doesn't meet your child's needs.
I tell parents that their child's college choice is not a reflection on the parents. It doesn't matter what your friends think as long as your student can reach their educational goals.
I also ask parents if they have a budget for college. Just like buying a house or a car, most of us are going to pay for college on a monthly payment plan. Have they considered what they can afford, or like me, do they just think they will figure it out when they get there? Equally important: have you discussed any of this with your child? The worst car ride I ever took was spending six hours coming home from an admitted student visit with a kid who fell in love with a college, and I said, 'We can't afford it.' The anger came off her in waves like heat off a blacktop road in late July. And it was my fault because I hadn't spoken with her about what we could afford. Her life wasn't ruined, and she ended up at the college that was the best fit for her, but I made it more difficult than necessary.
So, spend a little time thinking about your emotional relationship with money. It may save you lots of anguish.
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