Marino on Money: June 23
My child will be a freshman at college in the fall. Any tips on helping him handle money?
College is more expensive than ever, so stretching out your dollars is important. According to the National Center for Public Policy and Higher Education, college tuition and fees have increased 3 times faster than household income over the last 25 years. For every dollar the average family made extra in income, the cost of college increased by three dollars. It’s no wonder borrowing for college has doubled during that 25 year time frame. The government may be making more and more money available through grants and loans, but I’m not sure it’ll be enough. Something must change to make college more affordable. Government money and loans aren’t the long term solutions.
But what about now? Remember one of my favorite sayings, ‘The decisions I make today determine the options I have tomorrow.’ Start by explaining to your child that decisions in life are cumulative. If they make consistently good financial decisions, then their quality of life will generally get better and better. The same is true for poor financial decisions. They also have a cumulative effect but with a negative result.
Consider this illustration. We all know sleep is important. I need about 7 hours to feel rested and be productive the following day. If I only sleep 3 hours tonight, I might make it through tomorrow. If I only sleep 3 hours for the next 7 days, I’d probably collapse. Short term, I can miss some sleep. Long term, I’m in trouble.
Think of money in the same way. I need to budget my money and live within my means, just like I need to budget my time and get enough hours of sleep. Start by teaching your children to live within their means. If they can learn that, they’re off to a good start.
If you have a financial question for Ross, you can use the Marino on Money page.
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