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Parents these days have to worry about more than the birds and the bees talk. There’s another highly important discussion they need to have with their kids, the earlier, the better – saving for college.
According to a new survey by student lender Sallie Mae, half of parents will talk about the importance of education and saving for college with their kids when they are still in elementary school. And 80 percent of parents said it’s a discussion they’ll have with their teen.
The survey also found that the wealthier the family, the earlier the college savings discussion. According to MarketWatch:
Around 46 percent of families with household incomes above $100,000 said they had talked to their children about saving for college when they were 7- to 12-years-old, while families with a household income less than $100,000 were more likely to talk to their kids about it when they were teens. Both sets of respondents agreed on one thing: Saving early motivated college aspirations among their kids.
The majority of parents expect their kids to pitch in and help pay for college. About 60 percent of parents expect their children to have an after-school or summer job during high school. What’s more, 83 percent said they’ll insist their kids save some of their work earnings to pay for school, according to Sallie Mae.
The Kansas City Star’s Steven Rosen said kids should crack open their piggy banks to help with college costs.
It’s always a good thing when kids have skin in the game. Not only are they more likely to take the college process more responsibly, they will realize they’re part of a team effort of sacrificing and saving. It’s not just Mom’s and Dad’s problem to deal with.
Says Erin Condon, vice president at Upromise, the savings division of Sallie Mae, “After parents get their kids through college, 85 percent are still planning on supporting them financially. The support can be pretty long term, with about half of parents willing to keep kids on their payroll for between six months and five years.”
Rosen said this is why early financial planning is so important. “Before shelling out big dollars to send your children to their dream school and short-circuiting your retirement savings in the process, talk as a family about what you can afford to pay and how the kids can help,” he wrote.
Earlier this month, my husband and I started 529 college savings plans for our kids – ages 4 and 1. I graduated from college with $27,000 in student loans. I don’t want my kids to shoulder that kind of debt when they’re fresh out of college.
Have you discussed saving for college with your kids? Share your thoughts below or on our Facebook page.