5. "Do you know how much college costs? Let's talk about how we're going to pay for it—and what we can afford."
It's a good idea to start this conversation as early as middle school. No need to get into dollar figures at first—let's face it, those numbers are scary no matter what your age. But you should plant the seed that college is a major investment and that most families have to borrow money for it. Later, when your child is in high school, you can take a look at specific institutions and tuition costs, then talk about how that fits in with your income and savings. "Be clear about what you can realistically afford and how much she'd have to take out in student loans," says Kalman Chany, author of Paying for College Without Going Broke (Princeton Review). "Better to be brutally honest, even if it means lowering expectations, than to disappoint your child when the acceptance letter comes in." Remind your teen that there are other options, like going to a state college or living at home while attending a nearby university. And stress the importance of taking on summer jobs, especially now: The amount of money a student can earn before it is counted against you for financial aid requests will gradually increase over the next four years, from $3,000 to $6,000. "That change makes student earning more important than ever," says Chany.
When a Parent Loses a Job
It's natural to want to protect children from worries about layoffs. But if you fear that you or your spouse is at risk, chances are they've already sensed it. Being honest about your circumstances is the best way to help them cope, say experts. Let them know that traveling, eating out and even new jeans are luxuries that are temporarily suspended, and ask that they pitch in by bringing lunch to school, suggests Linda Sherry. If cutting back isn't enough and you're getting help from relatives, it's okay to tell your kids so they'll know you aren't alone during this tough time. But if you're facing severe setbacks, like losing your home or moving out of state for job opportunities, don't say anything until you're certain a change is taking place, advises Jean Chatzky, author of Not Your Parents' Money Book (Simon & Schuster Children's Publishing). Whatever the circumstances, be sure to offer constant reassurance. "It sounds obvious, but kids do imagine the worst," says Beth Kobliner. "Let them know that no matter what happens, you'll be there for them."
Originally published in the October 17, 2011, issue of Family Circle magazine.