Your kid will soon enjoy one of the most expensive things she’s ever gotten—a year of college. And as you witness her spending $20 a day on lattes and Chipotle, you have to wonder: Does she have any idea what money is?

By Rory Evans

Probably not, given how her generation deals in Venmo, Zelle and their parents’ Amazon account. And you might be unwittingly feeding her blissful ignorance. We asked financial guru and straight shooter Suze Orman to call out the three common mistakes parents make when talking to their kids about college. 

MISTAKE #1: Avoiding Money Talk 

“Parents make an error in not involving kids in money and financial conversations,” says Orman, host of the new Women & Money podcast. In the best-case scenario, you would have been talking money with your kids since they were 6, she says. The little-kid scenario that she describes—“pull out the toys they no longer play with and ask, ‘Which would you rather have, the toys or the money?’ ”—still works with teenagers. “It’s need versus want.” Because honestly, an expensive college isn’t really that different from those toys.

MISTAKE #2: Fixating on Brand Names

Kids can get hooked on schools the same way they chase after designer labels (exhibit A: your son’s Yeezy Boost sneakers, while you’re wearing randos from the DSW clearance rack). Parents can get sucked in too—it gives them bragging rights. “My daughter goes to Harvard!”

Orman mimics. “Ever hear a parent volunteer their kid goes to community college?” If you can easily afford it, Harvard or Yale is an option. For the rest of us (who are not, ahem, Aunt Becky from Full House), Orman points out that “the school will never make you; you make the school,” and in-state tuition at local schools remains a relative bargain. (An even cheaper option is a community college for two years, then transferring.) We’ve all heard those awe-infused conversations—about the kid who’s wanted to go to Stanford since before she could pronounce s’s—“and we talk about the achievement, but we don’t talk about the money,” Orman says. “You need to say, ‘Well, that costs $250,000—and that’s beyond our budget.’ ” In the event you do pay (or chip in) for tuition, Orman suggests setting up some expectations. When her own niece went to veterinary school, she got help from family—with the stipulation, Orman says, “that the day you get under an A, you don’t get a penny.” (Yes, she is a hard-ass, but that mentality is what transformed her from a waitress to someone who now lives on a private island in the Caribbean.)

MISTAKE #3: Not Putting a Price Tag on College

If you’re worried about paying for your kids’ college, sit down with them as early as possible (like, around age 10, Orman says) and explain that if they want to go to a university that costs a lot, you won’t be able to pay for it. “If you don’t have money to pay your bills today, if you don’t have retirement savings, then you shouldn’t pay,” she says. “People think they’re failing their kids when they can’t pay for college. But they’re actually making them really strong. If you look at a lot of people who succeeded, they didn’t go to an expensive college. Their parents aren’t rich. They succeeded on their own.” What’s more, Orman says, when you foot the bill and can’t really afford it, your kids will probably wish you hadn’t.

When Orman interviewed hundreds of recent college grads for The Money Book for the Young, Fabulous and Broke, “every one of them regretted that their parents had gone into hock for them,” she says. “There were no jobs and they felt horrified [at having spent the money]. They would have wanted to take out student loans rather than feel their parents suffer.” Students will virtually always get a better rate on loans than you will. And never borrow money against your mortgage or retirement to pay tuition, Orman says. If your kids do borrow money, they should remember her reliable rule: “Never take out more in loans than what you are going to earn the first year after graduating.”