Involving your parents
Paying for college is sort of like making a business deal with your parents. Learning the “terms” of their offer—how much they are planning to pay-will help you establish a plan for paying for college. Once you know how much of the costs will be your responsibility, you’ll have a better idea of the time, effort, and resourcefulness that will be required on your end.
Striking a deal with your parents
Say, for example, that your parents offer to pay 40 percent of your first-year costs. They've asked you to be responsible for the remaining 60 percent. You now have a starting point from which to plan the following:
- Scholarships: How much of your share of the costs can you cover with scholarships you have a chance of winning?
- Loans: What type of loan program should you explore to cover 60 percent of the first-year costs for your target school?
- Employment: Will you need to work part time to pay your share?
- Debt: At the 60 percent funding level over four years, how heavily will you be burdened by debt after graduation? You can use the "What Would My Loan Payments Be?" calculator to determine how much you will have to pay each month towards your student loans.
Some days a latte or a pizza feels like an emergency. Make sure you and your parents both understand what constitutes an actual emergency. They may be willing to pay for emergency costs directly related to school and your health while drawing the line at paying for clothing, car repairs and spring break trips.
Financial educators and planners always recommend that you set aside money in an emergency fund. To learn more about emergency funds and how much you should save, read Building an emergency fund.
As a college student, you're technically on your own in the world-and there may be times when you find yourself in financial trouble. Unexpected expenses can arise on a moment's notice. You don't have to face these challenges alone, though. Seeking your parents' experienced point of view can be a great help.
Ask for advice
What would you do, for example, if your car breaks down and you really need it to get to school or a job? In such an event, consider the following action items:
Call your parents immediately. Rather than ask for money, ask for their advice. They may suggest that you:
- Get an estimate on repair costs. Mechanics usually provide estimates for free.
- Review your transportation options, such as riding the bus or joining a student carpool.
- Call your parents again. Update them on what you have learned.
- Proceed with the actions your parents and you agree on.
Parental views & shifting responsibilities
You and your parents both need to understand that you are in a transitional period. You're moving from dependence to independence. That's why asking for advice-rather than money-is important. Your folks may want you to realize that their advice in emergency situations is as valuable, if not more valuable, than simply sending money to you, no questions asked.
It's also important to understand changing financial priorities from your parents' point of view. They probably think that your college years are an ideal time to begin shifting financial responsibilities in your direction. If you sense this is the case, ask them directly. They'll be glad you opened the door to talking about finances.