More than a few families I meet with ask the question: “How did we get into this situation?” They are dual-income families making solid salaries, but have significant debt and are barely able to keep their financial house in order. And as their oldest child starts planning for college, they have no idea how they can afford it. 

The Atlantic published an insightful story along these lines: The Secret Shame of Middle-Class Americans. The article points out that nearly half of Americans would have trouble finding $400 to pay for an emergency, and that includes the author who is a well-established writer.

Financial Literacy 

A big part of this problem comes from a lack of financial literacy and planning among American families. We have some very strong belief systems around money that actually cost us in terms of cash flow and efficiency of capital. We also tend to be more emotional than logical when it comes to our kids – often letting our children pick their college and then try to figure out how to afford it. This leads to paying far more than necessary for college.

Yes, our children should have input on which college they attend. However, parents do not need to go deep into debt so they can choose any school to which they get accepted. This is one of the three biggest expenses parents will face in their lifetime. So, shouldn’t they have input on the decision as well?

Right Fit Colleges 

In chapter 9 of Never Pay Retail for College, I talk about choosing “right fit” colleges. Choosing schools where students apply has the single biggest impact on the overall cost of college for our son or daughter. If we choose schools where our student will fall in the top 25% of the incoming class, the school will often incentivize them to choose that school. That means scholarships or tuition discounts. And that can save 25%-50% off the retail cost for college.

With proper planning, families can get their financial houses in order and afford a good school for their children. It just takes the right guidance to make it happen. Contact us to schedule a consultation.