Since 2001, the cost of tuition, room and board at public colleges and universities has increased more than 40 percent, according to the National Center for Education Statistics. Coupled with the lingering effects of the recession and their impact on parents' finances, this increase in college costs represents a significant financial challenge for many families.
Further complicating the issue of how to pay for college is that teens and their parents might have widely varying expectations about how to do it.
A new national study from Junior Achievement and The Allstate Foundation reveals some startling findings. The Teens and Personal Finance Survey, now in its 16th year, gauges teens' attitudes and behaviors around money.
For the first time in the survey's history, we surveyed parents, too, to compare and contrast their responses to those of teens.
We found that nearly half (48 percent) of teens think their parents will help pay for college. However, only 16 percent of parents report that they plan to pay for their children's post-secondary educations.
This finding emphasizes the need for parents and their kids to have regular, age-appropriate conversations about money, especially when planning for major expenses such as college.
Many young people want to learn about managing money from their parents. A significant majority of teens we surveyed (84 percent) say they look to their parents for information about how to manage money.
Conversations about money are tough, and parents might feel ill-equipped to handle them. Some parents might feel uncomfortable talking about money matters with their kids because they are uncomfortable with the subject or because of their own financial missteps. This is where school-based programs can come in, to provide students with important personal finance education.
I encourage parents to work with their child's school to provide students with programs that teach real-world money management skills, such as those provided by Junior Achievement. Students learn how to prioritize needs and wants, how to create and stick to a budget, and about the importance of saving.
Financial literacy education is one of the cornerstones of Junior Achievement and is included in many of our K-12 programs.
However, in 2008, at the request of Fayette County Public Schools, Junior Achievement wrote a financial literacy curriculum that was specifically targeted to seventh-grade students.
This six-lesson curriculum is now taught not only in Fayette, but the surrounding counties. It deals specifically with budgeting, credit/debit, credit history, investing, interest and the correlation between education and financial success.
For the high-school grades, Junior Achievement offers JA Personal Finance, which focuses on earning money, spending money wisely through budgeting, using credit wisely, and protecting one's personal finances.
Parents today might face more — or at least different — challenges than parents in previous years, but thankfully there are resources available to help today's young people face their futures ready to manage their finances with skill and confidence.
Learn more by calling JA of the Bluegrass at (859) 219-2423 or visit the website at www.jalexington.org.