Ah, those good old college days! Remember the tough professors, the new friends, the escapades that now make you laugh (or groan)? But for many students and their parents, college is more than that--it's a source of conflict about money, love, support, nurturing, and independence. As a new academic year approaches, here are some difficult situations you may encounter in working with parents, grandparents, and their offspring.
My client, a divorcee, is worried about letting her only son go off to college several hundred miles away. He has not been good at managing money, and she fears he may get in over his head with credit card debt. How can I help her? There are no quick answers to this serious problem. Many college students with little or no money experience are inundated with credit card offers. Some do end up deep in debt, and may even be forced to quit school to pay off their bills--a tragedy that could be avoided with better financial education up front.
Encourage your client to share her fears and concerns with her son at a non-stressful time and in a non-confrontational way. For example, she might say something like "Honey, I've heard so many horror stories about college kids piling up hundreds and thousands of dollars in credit card debt. Let's talk about how I can help you avoid this situation." If she herself has not been the best role model for financial prudence, she should be open about it. The main thing is to help the son learn to set limits on his spending without making him feel like what therapists call "the identified patient"--the member of the family who's identified as the one with the "problem." Suggest that they discuss what's important to him, and how his spending choices may affect whether he meets these goals or not. (If you're willing, you might volunteer to meet with him alone to talk about this.) Your client may also want to take him to a local meeting of Debtors Anonymous, so he can hear for himself how overspending and debt can wreck otherwise functional lives. From a practical standpoint, the two of them have several choices. For instance, they can head off the whole issue of indebtedness if he uses a card that is pre-loaded with cash, such as Visa Buxx or MasterCard's iGen. Or he might start out with a debit card and graduate to a credit card after showing that he can spend responsibly. I would suggest that the statements be mailed to his mother, and that he send her a check to pay them off. That way, she can monitor the balance. Consider doing everything you can to support your client before her son goes to college and gets overwhelmed with debt. Together, the two of you may be able to avert a financial train wreck.
My client couple is fighting about whether or not to pay their daughter's student loans after she graduates. They funded the first two years of college, and she borrowed to pay for the last two. The mother has told her daughter that they will repay these loans. Knowing her husband is against this, she didn't consult him before making this promise. Now he insists that their daughter is responsible for paying back these debts. Neither parent will give way. Help! What is fueling the disagreement between the mother and father? Is it a difference of philosophy about parents' role in educating their children, perhaps based on different cultural backgrounds or upbringing? Or is it strictly a financial issue: they just can't afford to pay any more without sacrificing their own security?
Once you have encouraged them to get to the root of their feelings and examine their financial situation, you may be able to help them find some common ground. The mother probably needs to acknowledge the unfairness of promising payment without first getting the father's agreement. If they don't have the resources to make good on her promise, the daughter may need to step up to the plate and pay off part or all of her loans. A financial and emotional compromise that might work for all parties would be for the couple to pay half or a third of the loan amount, while the daughter pays the rest. It would be a good idea to suggest that these clients try to work out their differences in the future, with the help of a money therapist or couples counselor if need be, to avoid dragging their child into the midst of their own unresolved conflicts.
A recent marriage was the second one for both of my clients, each of whom has a child in college. Her son is going to a state university, while his daughter is enrolled in an expensive private college. The difference in the cost of education is causing some friction between the spouses, even though they entered the marriage with fairly similar net worths. How can I help them deal with this?
Blending families is never easy, whether it's the first marriage or the fifth. The important thing is to help this couple hash out their priorities and communicate openly with the children about their differences as well as their shared goals. I would begin by finding out whether you are dealing with two different money personalities. Is the father a spender who tends to buy what he wants, whether he has the money or not? By contrast, the mother may be a hoarder, frugal and self-denying even if she has enough money to spend on the important things. Encourage both spouses to think about and write down their goals as individuals and as a couple. By sharing their separate lists and trying to integrate them, they can see where the areas of alignment or disagreement lie. Then I think they need to sit down with their kids, either together or one on one, to discuss the choices that have been made in colleges and college costs. Encourage the children to talk openly with their parents about their feelings, and explore whether their treatment needs to be equalized in any way. For example, if the state-school son resents the disparity in funding, would he be satisfied with a more generous spending allowance, or is he longing to transfer to a private school with better courses in his major? If so, is the mother willing to increase her spending to make this happen? Would her husband be willing to contribute, in order to level the playing field? By helping this couple take the time to listen to each other's needs and search for creative compromises, you could play a vital role in improving their marital and financial harmony.
My clients' son will soon be 18, giving him legal ownership of the custodial account they funded for his college education. He wants to withdraw the assets to buy new sound equipment so his barely-afloat ska band can burn a CD. His parents are appalled. They want me to help them say no to him, but what can I realistically do?
A separate meeting with the son may yield more honest feedback from him about going to college versus his music. Once you know this, you'll be in a better position to help the parents recover from their "freak-out" and suggest a compromise plan that all three can live with. For example, maybe he would agree to his parents underwriting a loan for the new equipment, on the condition that he leaves the custodial assets untouched for now. As much as your clients may want their son to have a college education, they need to remember that he soon will have free rein with this money. If they come down too hard on him about the impracticality of spending it on the band, he may retaliate with an adamant refusal to attend college. Worse yet, they may provoke a rebellion that will drive him away from them. Use your understanding of the son's personality to figure out how you can help build a bridge between him and his parents.
A stressed-out couple has just left my office arguing fiercely about their son, a junior in college. His grades have been slipping badly, and the parents aren't sure why. His father wants to cut off the boy's educational funding and make him get a job, but the mother is willing to give him another chance. How can I resolve this?
Take some time with the parents to determine what approach might be most successful with this young man. When he has disappointed them in the past, what (if anything) has worked best in getting him back on board: limit-setting with strict consequences, second chances to mend his ways, or perhaps a middle course that defines the steps he must take to restore the parents' trust? Consider meeting with the son to explore his feelings. How does he account for his falling grades? Young people in their late teens and early 20s sometimes aren't ready for the college experience. I've known quite a few who have taken time off, then eventually gone back to finish college with greater maturity and a much better attitude about learning. Ask your clients' son if he can help his parents by suggesting a workable plan. If he is toying with dropping out, for instance, he might propose taking a leave of absence for a semester or two, and then coming back when he's ready to work harder for his education. Or if all three of them are agreed that he should stay in college, you might explore a multi-tiered incentive plan. For example, the parents might commit to funding the next semester, but will cut their support for the following semester in half unless he brings his grades up by a certain number of points. Ask the young man what consequences of academic negligence would feel appropriate to him.
In general, I find that a several-step approach works better than either extreme--unilaterally lowering the boom, or offering another chance with no consequences for failing to take advantage of it. Good luck in helping all three navigate this difficult situation without sinking into angry recriminations. It's not easy to help your clients find a balance between keeping their college-age children too close and pushing them too forcefully out of the nest. Parents' attitudes about nurturing independence are often laden with deeply held beliefs and family traditions about how to express love and support. You can help most by building bridges between the generations, while making sure your clients' giving to their children does not come at the cost of their own future security. If you do this well, your clients will view you as a "life coach" worthy of their respect. And they'll thank you for helping to make this difficult transition a little easier for them and the children they love.