<p>Here’s an article about explaining how money is tighter to teenagers. Interesting.</p>
<p><a href=“http://www.nytimes.com/2008/10/12/fashion/sundaystyles/12teen.html?pagewanted=1&_r=1[/url]”>http://www.nytimes.com/2008/10/12/fashion/sundaystyles/12teen.html?pagewanted=1&_r=1</a></p>
<p>My kids and their friends have fun trying to get the best deal. I feel sorry for parents that wait until their kids are teenagers to talk to them about money. I can’t even think of the last time any of us bought clothes that were not on sale. And we don’t pay sticker price for college either. :)</p>
<p>This “financial discussion” has been a long time coming… When my first son was a senior in high school (2 years ago), I was shocked at how many parents just blindly let their kids apply wherever with no investigation into costs or discussion of how much the parents could afford. Needless to say, some kids were very disappointed when spring rolled around and their parents finally looked at the financial costs of their kids’ accepted schools and declared, “we can’t afford THIS.” </p>
<p>What the heck have parents been thinking??? Do they think that tuition is the same as when they went to college or just a bit more? Do they think that R & B costs are what they were 25 years ago??? I really think that is what was going on. I can’t tell you how many parents have said to me, “I had no idea that R and B would be $7-11k per year; I thought it would be a couple hundred a month.”</p>
<p>I recently spoke with a parent (whose child is a senior in high school) and he was visibly upset to have learned that he has to come up with about $70k for his kid to attend a state public univ over the next 4 years. What was he thinking before he learned this??? He is a college educated professional man.</p>
<p>Part of the problem is that parents don’t often know what the words “Financial Aid” mean. They think it’s mostly free money and perhaps some work/study. </p>
<p>They also think that their “honor student” will surely get some merit money without ever looking at college websites to find out what the criteria are. (It doesn’t matter if your kid has a 4.0 GPA; it’s unlikely that he’ll get much of anything if his/her ACT is a 26 (or SAT equivalent.)) And many schools don’t give merit scholarships anyway. I recently spoke with a friend from Wisconsin who has always “bragged” about how smart her d is (All A’s, honors at school, NHS, etc). Well, she just got her D’s ACT score and its a 20 (same as when she took it her junior year). This mom had no idea how low an ACT 20 is. When I told her what the percentile was she was shocked. She had been led to believe that her D was so smart because her d’s schools had been giving inflated grades all these years.</p>
<p>Anyways… my point is that many parents have not been paying attention to costs or anything for a long time.</p>
<p>You may want to watch Oprah today about this article.</p>
<p>So much depends on personality.
My own parents never spoke to us about money- although I had to get a job in high school in order to get school clothes ( I actually started that in junior high when I worked summers picking strawberries, I was too short to pick blueberries, which paid better 
)</p>
<p>When I was hit 18, my mother gave me an $1000 life insurance policy that apparently my grandparents bought when I was a baby. ( that was the extent of any post childhood help from parents)- I knew it wouldn’t cover college & I didn’t know about financial aid- so I bought a car & some new shoes.
That same summer , my mother got a face lift ( :rolleyes: she was 42 )went on a cruise & bought a new car ( my father had just died)- I sure didn’t learn about budgeting from her.</p>
<p>I have an odd frugality but then I will splurge on things that are more important to me.
Both my kids are very frugal, although it is much harder for my younger daughter as times were easier when her older sister was going to school, and she can’t help but feel like she got the short end of the stick.
( older daughter also still wears clothes from high school & younger daughter longs for couture)</p>
<p>For example- we have pledged to pay EFC, for younger daughter that will almost cover the costs of an instate public university- for older daughter that got her into an expensive private school that met 100% of need.</p>
<p>However- we also have allowed younger daughter to go on several big trips with her school, places H & I have never visited- like Hawaii, NYC/DC & Africa. She earned a portion of the money, but we chipped in quite a bit too.</p>
<p>My kids are a little older than my friends kids, so they have been pumping me for information about [WICHE</a> - Student Exchange Programs](<a href=“http://wue.wiche.edu/]WICHE”>http://wue.wiche.edu/) and how to manage college costs- so they are prepared.</p>
<p>I think that teens having a job shows them a lot about money and the working world. My wife grew up in a third-world country and has explained much about money from that perspective. It has worked with one; not so well with the other. She doesn’t have a job yet but wants to start one next year.</p>
<p>"Parents are suddenly saying ‘no’ and their kids are saying, ‘What do you mean?’ ” said Robert D. Manning, an economist at the Rochester Institute of Technology and author of “Credit Card Nation.”</p>
<p>These are difficult conversations. Panicked, stressed parents are struggling to explain and impose restraints, just when teenagers are expecting more spending money, not less. Many adolescents respond with anger at what they see as a bait-and-switch world, fear for their families and confusion about budgeting.</p>
<p>Family therapists, teachers and parents tell anecdotes about teenagers who are badly rattled by the news, in denial, or both. A daughter is shaken as her mother calls for an emergency family meeting. The son of a Wall Street financier whose fortune has collapsed tauntingly tells his father he can take care of himself: he will sell more marijuana.</p>
<p>“It is an unbelievable shock to affluent families that their lifestyles are gone for good,” Dr. Manning said, “and their children are ill prepared for it.”</p>
<p>Mrs. Postle’s teenagers asked whether the family was poor. Mrs. Postle, who teaches economics at the Columbus chapter of Junior Achievement and whose husband manages heating and cooling commercial installations, felt insulted.</p>
<p>The family was not poverty-stricken, she responded, but staying solvent was costly. Although many parents consider finances the province of grown-ups, Mrs. Postle decided her children were too insulated. She showed them the monthly bills.</p>
<p>The teenagers were stunned. When her son saw the mortgage bill he thought it was an annual payment."</p>
<p>Imagine what’s going on in the homes of families who were just getting by before…</p>
<p>Oh no. I feel so bad for the spoiled kids!</p>
<p>^
How will they ever survive?!?</p>
<p>Adding to JL50ish’s post – it’s shocking to see how some parents handle the college cost issue. The most extreme example that I saw was a coworker had gotten through the college app and acceptance process with her D and just around the time of HS graduation, they finally looked into the cost of the school decided that financial aid would be necessary; it would always have been necessary and this had nothing to do with the econony, changed job status etc – they just chose not to think about it. Since they never discussed it when the D was looking at, applying to, getting accepted, or committing to a school, she thought they’d been paying 100%. Thus, the D decided, 2 months before college started, that if she had to take out loans, she wasn’t going to college at all! It’s amazing to me that in the entire process, no one thought to discuss the cost, who would pay for what, whether the D would have loans/jobs etc. The parents had their heads in the sand and were terribly upset when D said she wouldn’t go to college; their solution – have a bbq and invite over all their young co-workers to talk about how much student debt they have i.e. ‘i have $x in debt so it’s no big deal.’ Very mature way of handling it all…</p>
<p>I kind of felt the “bait-and-switch” mentality when I was applying for schools, personally. (This was never a problem with my parents in general–we got $10 per week for doing chores for most of my teenage years and were told that that ended when we got our drivers’ license–if we wanted spending money then, we needed a job.) I kept looking at the price tags on the expensive colleges my dad kept showing me and touting to me and going “that’s WAY too expensive, I want to go to grad school!” And he kept telling me not to think about price, not to think about price, that I would be missing an opportunity if I didn’t apply and what if I got a whole lot of aid? These are schools like Duke, Vandy, etc. There was never a chance I would get merit money at most of them, and I knew it. My family also doesn’t stand a chance for non-merit aid, particularly not when my mother’s working (as she is now). </p>
<p>I ended up applying to about ten schools to appease him, and once I’d finally done that–when I’d finally been won over to all the good things these schools had to offer–he comes to me and tells me that the most he and my mother would pay for my education is $20,000. This coming when the total cost of attending most of these schools is around $40,000-$50,000! I was really angry at him–and to a point, still am–because I had the right of it, I was factoring in what I could afford and what was attainable, and he made me put in a lot of work to apply to schools that I would have had to take out big loans to attend (which, for me, was not an option). This when I live in Georgia, and I have access to perfectly good schools which cost less than $10,000 to attend! I felt/feel that it was a waste of my time to look at those schools when I could get a good undergrad for less and in any case will be getting a grad degree on top of it–no one looks at the undergrad college when there’s a grad degree!</p>
<p>While my kids don’t know our finances, we always made sure that they worked from the time that they could - particularly summers. I don’t understand parents who give everything to their kids on a silver platter.</p>
<p>If you want to go to graduae school, make sure you apply when you’re at least 24 so that your parents’ EFC won’t be factored in and you’ll receive more financial aid as an independent.</p>
<p>My parents haven’t had the “money talk” with me, but I’ve figured it out myself–I think they knew I would. I asked for a shirt and a Jamba Juice gift card for my birthday and have been babysitting more to get my own money rather than using theirs. Personally, I think if your kids are still spending your money wildly during a time of financial crisis for your family, you should take a look at what you’ve raised them to value.</p>
<p>“If you want to go to graduae school, make sure you apply when you’re at least 24 so that your parents’ EFC won’t be factored in and you’ll receive more financial aid as an independent.” - unfortunately this doesn’t apply to medical school.</p>
<p>Money… its a crime… share it fairly but dont take a slice of my pie…</p>
<p>I know I felt somewhat “baited and switched” when applyiing to colleges. My parents told me to “apply anywhere,” including schools like Northwestern and refused to answer my questions about what we could afford. When I got my first acceptance, it was to an expensive private U–my dad was quite upset when he saw the price tag. Fortunately, I only applied to merit aid schools, but some still left me with “stretch” costs (about 20-24k a year), which I wouldn’t have felt comfortable saddling my parents with. I wish my parents had given me some guidance in this area, though.</p>
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<p>If you already have a bachelors degree then you still file as independent even if you’re under 24.</p>
<p>Yep, for FAFSA purposes, you are independent if you have a bachelor’s degree. This determines the amount you can BORROW. It does NOT determine how much financial AID you will get. Most law schools and med schools count parental income in doling out fin aid if you are under 27 or 28 or so–it varies a bit among schools. Pure fin aid is very limited for law or med school. There is also very limited merit money. Most students take loans. Top law schools often have loan forgiveness programs for those who go into public service fields and at some schools, even for those who don’t but who take lower paying jobs. Access to these programs doesn’t depend on age. </p>
<p>And if you are talking Ph.D., then it’s all merit aid.</p>
<p>Back in August, when the market was pretty good, we gave Son (rising jr.) an overview of what we thought we could afford for college. The outlook included savings, his expected contribution from work or merit ($2000/yr), unsub Stafford if necessary, and a monthly payment plan for us if necessary. We emphasized that unsub Staffords will be the max he’s allowed to borrow. </p>
<p>Fast forward to October. Son saw the market downturn and picked up on my distress about diminished savings. In response he took it upon himself to explore ROTC scholarshps. </p>
<p>H was quick to assure him that things aren’t “that bad” and we’ll recover the losses. I, OTOH, was struck by Son’s comprehension of the big picture and the maturity to seek personal ways to help. I was sad and proud at the same time.</p>