Honestly, how? I’m asking seriously.
Many parents do not talk about money with kids.
The vast majority of schools don’t teach anything about finance.
Kids don’t work until they’re out of high school.
How would they know what it takes to pay the bills if they have no idea how much the bills are?
Of course you can earn a good income in many ways. I’m simply saying that I find it helpful to tell my kids what our income is and what our expenses are. I’m not sure how anyone could interpret what I’ve said to mean that I am encouraging my kids to go into a similar career than mine or my spouse’s. Or that these conversations have anything at all to do with who I want them to rub noses with.
But perhaps some of the tendency for students to aim for the highest paying job prospects that is often decried on these forums is based on the students realizing that a more typical $35,000 per year new college graduate pay level will not be able to sustain anything close to the lifestyle that they grew up with that parents making “incomes too high to qualify for financial aid” provided.
Just tried out Abacus. One problem I can see with it is that it gives an overall estimate of financial aid but it doesn’t break it down by type. In other words, a school that gives a student $20,000 in loans is going to look just as generous as a school that would give the same student $20,000 in grants. From Abacus it would appear both schools are offering the same deal, but in reality the student would graduate from School 1 with $80,00 more debt. I can see why schools that offer much of their FA in the form of grants wouldn’t want to participate. Frankly, I would want my kid to go through the school’s calculator.
It’s possible to disclose the cost of bills without disclosing the amount of income.
My husband agrees with you, and as yet we haven’t come to a consensus about how much to tell our kids when we’re going over the financial stuff with them. The junior is aware that she will have to have significant skin in the game, but not much beyond that.
It is, personally, really stressing me out that we’re not sitting down with her and showing her all the numbers. My husband doesn’t feel like it’s necessary. Since he is much, much MUCH better with money than I am (I come from a family of financial trainwrecks), I defer to his abilities on this matter, but I still think we need to be more transparent.
Neither kid has any idea how much it costs to run this household, or how much of our income goes to taxes and retirement and the monthly stuff like heating, healthcare, etc. I feel like I’m doing them a disservice by not showing them how it works,
H feels like they’ll figure it out when they need to and they’re on their own, because that’s how he did. Since nobody on his side of the family is broke, and they all live within their means, I just sort of sigh and go with it, because it obviously has worked for them.
We told Kid1, “This is how much we are willing to pay. Period. End of story.” It’s irrelevant how much it cost to run our household.
Why do you feel compelled to show your kids all the details of your finances?
Presumably, if the kid wants to run a net price calculator on a college web site, you would then run it for them if you did not want to detail all of your finances?
Click on the “Details” button and read the fine print:
“College Abacus does not show federal loans as aid because students will ultimately pay those loans.”
Whether “total aid” includes both institutional aid and non-institutional aid (such as Pell grants), I’m not sure.
That’s a very good question. It’s not rational, certainly.
Part of it comes from my upbringing where I blithely and ignorantly signed papers for freshman debt, and my parents sent me off to college, only to tell me that they’d spent the whole wad on one year of a “prestigious” school (so my mother could brag to her friends) when that money might have lasted me all four years in an in-state school. Or not-my parents were notorious spendthrifts.
So I feel like if we show the kids “all the cards” they can see what they need to do and what we can do for them, and that there aren’t any financial hijinks going on. However, there have never been financial hijinks with us, so I’m probably assigning them a lack of trust in our ability to provide for them that doesn’t exist.
I should pay myself for shrinkerizing myself this morning :P.
In my family, it was just part of basic financial education. My mom was a banker for 30+ years and thought that financial education- the good, the bad, and the ugly- was important. My dad ran his own business and I used to watch him do the billing and sorting and all that. I have always loved numbers so it was a fun way to learn math and finance. I can’t even begin to tell you how much I appreciate my parents for sending me out in the world with my eyes wide open about money.
On the other hand, many of my friends were shocked when they started paying bills on their own. How were they supposed to know how much things cost? The mortgage, water, electricity, etc? They’d never seen those bills before.
I hope to be financially transparent with my kids the same way my parents were with me. I can’t imagine a scenario where I’d be secretive because that’s just not how it’s done in my family. My maternal cousins were all raised the same way as me- knowing their parents’ finances. It probably comes from the fact that our grandfather’s culture (he’s Romani) is traditionally very open about money. Both debts and wealth are largely shared throughout the whole family and community.
The potential problem I see with College Abacus is that schools using the CSS Profile can consider anything they want in awarding financial aid, and as a result, Abacus might badly misrepresent the FA offer a school would make by failing to include all the right data inputs. Consider family farms. Many schools would consider a family farm an ordinary investment asset, and “tax” it at a standard 5% of net asset value. But in many parts of the country, farmland prices are disproportionately high relative to incomes from farming (in part because there’s a speculative element built in to the price of farmland), so that working farm families may be “land rich but cash poor,” i.e., while they’re sitting on valuable assets, their current livelihood depends on using those assets in a way that produces only a modest income. So some schools will treat farmland differently than other investment assets, perhaps tying its imputed value to the income it generates. Others may limit this special treatment only to owner-occupied farms. Still others may exclude farmland (or owner-occupied farmland) from investment assets completely, counting only farm income toward EFC. There’s a plausible rationale for any of these approaches; there’s not one obviously “right” answer here. But the colleges on their own NPCs are going to ask all and exactly the right questions that lead to the right answer on what FA offer they would make. Other colleges are going to ask different questions, leading to different answers. If you run each of the NPC calculators separately, you’ll get all the right answers—but you’ll also be inputting different data for different colleges. Abacus is going to ask you to input one set of data which may not fit all the colleges, and as a consequence might give you wrong answers for some of them. If I were running a college, I’d find this highly objectionable, and I’d decline to participate.
Abacus does, at least to some degree, tailor its questions to the individual college. It will state something like, “We are asking for this information because Johns Hopkins University wants it.” Whether it asks for ALL the information each college wants, I’m not sure. However, it does appear to be drawing information for each college through an interface to each school’s NPC. It isn’t offering its own one-size-fits-all NPC.
The College Board must be doing much the same thing. But again, the list of participating colleges isn’t too comprehensive.
I consider it more than just a convenience to be able to use an aggregator like these to generate multiple estimates. The aggregator allows the student (or parent) to save a single set of family financial information for multiple estimates. This helps ensure consistency in building your estimates.
The College Board (and a few other providers) offer a platform for colleges to host their net price calculators on. Of course, colleges can do some customization of questions and calculations within the the College Board net price calculator platform. But that means that the College Board is the actual net price calculator for those colleges.
College Abacus is something different. It looks like it tries to web-scrape the net price calculators, or possibly interface to the back ends of common platform ones (e.g. the ones using the College Board platform). Of course, it needs to catalog all of the special questions and ask them whenever a user wants to include a college that has special questions.