With U.S. college enrollment decisions for autumn due by May 1, some families are using the application process as an opportunity to teach their kids valuable lessons about finance.
What college-bound children learn now about the difference between grants and loans and compound interest could make a world of difference when they graduate.
As New York parent Eric Yaverbaum says, "Fiscal responsibility is worth taking your best shot to teach."
Here are four tips from parents on getting kids to listen and learn about money:
Make Future Loan Payments Real
When Cary Carbonaro's stepson was choosing colleges four years ago, he was deciding between in-state schools and private colleges, with price tags that differed by about $5,000 a year. Carbonaro, a certified financial planner in suburban New York City and author of "The Money Queen's Guide," did the math.
The stepson's loan balance of $20,000 for a private school would mean a monthly payment of $300 for 10 years.
"Can you live with that? It will be like having an extra car payment," Carbonaro asked him.
When Carbonaro's stepson decided to go to the private school, she went the extra step of having him sign a contract that detailed his financial responsibilities as well as those of Carbonaro and her husband. The stepson worked part-time through school and recently graduated with a degree in biology. "He has been on his own financially since the day he graduated," Carbonaro said proudly.
Calculate Future Earnings And Budgets