Have you had “the talk” with your teen?

No, not that talk, but a talk that’s arguably just as important: the old-fashioned dollars and cents talk — particularly as it relates to your child’s game plan for paying for college.

Most high schoolers spend a ton of time prepping for the college application process – padding their resumes with AP classes and the ideal mix of clubs and volunteer opportunities. But after all that hustling, there’s one thing they may not have considered: the cost.

Unless you’re planning to foot your son or daughter’s entire college bill, it will be immensely beneficial to them if you spend a little time having an adult money conversation. And you don’t need to wait until senior year — the sooner you can start the better, because it’ll give you both more time to prepare and save.

After all, the point of college is to help your child get a great job that will help them live out their dreams. You want to help them understand their financial situation so they don’t wind up having to put their dreams on hold because of debt. Here are five topics that’ll get the discussion started if you’re thinking about how to talk to your teen about paying for college.

GET REAL ABOUT COLLEGE COSTS TO ELIMINATE ANY SURPRISES

Many kids aim high when they consider schools, and that’s admirable. However, your Ivy League hopefuls may be shocked to learn that one year at an elite university can come with a $75,000 price tag. By telling them how much of their college costs you intend to cover, kids have time to adjust their target schools, ramp up their savings or start planning scholarship applications.

The Department of Education’s College Scorecard is a handy tool for researching tuition costs at U.S. schools. Keep in mind, these numbers consider need-based aid, which your family may or may not qualify for.

SUGGEST WAYS THEY CAN CONTRIBUTE

Blowing birthday money on designer headphones is instantly gratifying, but their future self would thank them if they had stuck even some of that money into a college savings account instead. Talk to your teen about the benefits of saving a portion of the money they earn through an after-school or summer job, or what they receive as a gift, and introduce them to the concept of compound interest to show how even a modest amount of savings can grow significantly over time.

HELP THEM RESEARCH LOANS AND EDUCATE THEM ABOUT REPAYMENT COSTS

Compound interest is beautiful in a savings account but ugly in a loan you’re trying to pay. Compound interest is the reason you see stories like a student who paid $18,000 toward her $24,000 student loan and still owes … $24,000.

A teen determined to borrow $50,000 to attend a dream school may not realize how that loan will grow, due to interest, and the resulting impact it can have on their financial future a decade or more down the road — especially if they have difficulty paying.

Now is also the time to talk to teens about real-world budgets, as many teens really have no idea how much they will spend on life’s necessities such as insurance, housing, commuting costs and more. That’s why it’s smart to conduct a first-year-out-of-college budgeting exercise.

Start by researching salaries of their intended profession, along with average rental costs in the city they want to call home. Then, compile those essential costs: cell phone service, health insurance, renter’s insurance, food, utilities and more. Finally, as a cherry on top, factor those student loan balances into that hypothetical monthly budget. It can be an eye-opening exercise, and a perfect segue into a discussion about ways to repay student loans faster.

This budgeting exercise isn’t meant to scare your teen out of pursuing a degree that puts their passions to work. However, poring over these details long before they graduate equips your teen with the knowledge they need to make an educated decision. Leave it up to them to decide whether job prospects in their intended field of study match the life they hope to live outside of work.

HELP THEM IDENTIFY AND APPLY FOR SCHOLARSHIPS

The easiest source of scholarship funds is the package of grants and other aid your student may receive from the university that accepted their application. Of course, money for school doesn’t always accompany an acceptance letter. Fortunately, there are numerous sources of scholarship money, and every little bit can count.

High schoolers should start with clearinghouses like Fastweb and Scholarships.com, which cover everything from sweepstakes to niche programs. Then, look in your own backyard. Numerous civic groups, or even your teen’s employer, may offer scholarships based on your teen’s academic history, athletics, volunteerism, work history and more.

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