Does Johnny tell mom and dad the truth - or keep it a secret?
More than half of college students (55 percent) admit they hide
information from dear old mom and dad about all that money they are
spending, according to the 2014 RBC Student Finances Poll. But only
33 percent of parents realize that's the case.
Another disconnect: While 90 percent of parents claim to be on top
of how much debt their kid owes, just 78 percent of students agree
their parents are up-to-speed on their finances.
Welcome to a college course that is not really on the curriculum,
but that every student is grappling with. Call it Secrets and Lies
"It may be that a student doesn't have as much money as their peers,
and is trying to keep up with what their friends are doing," says
Christine Schelhas-Miller, a retired faculty member at Cornell
University and co-author of "Don't Tell Me What To Do, Just Send
Money: The Essential Parenting Guide to the College Years."
"Or they may be getting lots of credit card offers, and naively sign
up," Schelhas-Miller adds. "Then they're not sharing this
information with parents, because they're afraid of getting into
Of course, money disconnects between parents and kids are nothing
new. In fact they are par for the parenting course, whether they
revolve around tooth fairy money or allowance sizes.
The difference when kids reach college is that the sums involved are
taken to the next level. Serious money, which can, in turn, have
very serious consequences, like debt accumulation or poor spending
habits that could dog families for years to come.
After all, the average Class of 2014 graduate with student-loan debt
is in hock to the tune of $33,000, according to Mark Kantrowitz,
publisher at Edvisors, a site about planning and paying for college.
That's the highest number ever.
The potential scenario, for a college student whose only
financial-planning experience has been with Monopoly money? A couple
of adviser Darla Kashian's clients were gobsmacked to find out that
their kid - unbeknownst to them - had blown through a significant
inheritance in his last years of college, to the tune of tens of
thousands of dollars.
"They didn't know what he had done, and were astonished to find
out," says Kashian, who is an adviser with RBC in Minneapolis. "In
their minds, he was using the inheritance to pay off his student
loans, and now he was returning home with lots of debt. He was
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Of course, students may suspect how badly they are screwing up
financially. According to the RBC poll, 26 percent of college
students admit they may be doing damage to their credit rating. Only
17 percent of parents think their little angels could possibly be
doing such a thing.
Such blind loyalty to one's offspring isn't cute; it's actively
harmful. But when it comes to such a delicate and emotional topic,
many parents just don't know where to start.
"It's like the sex conversation: Parents are worried about how to
even bring it up," says Schelhas-Miller. "But they need to get over
that hurdle, and think of it as a big part of their parenting
Her advice: Arrange a pre-emptive strike, and have The Talk over the
summer, before your kid even heads off to campus. Then arrange for
regular money conversations throughout the school year - maybe once
every couple of weeks, or maybe once a semester, depending on how
responsible they are - to ensure budgets stay on track.
If you just avoid the subject and table the conversation for later,
an unprepared college kid could stack up debt very quickly indeed,
and it could be too late.
Kashian is a fan of online budgeting tools like Mint.com, a unit of
Intuit, which can be set up to allow access to both parents and
their kids. That, of course, requires plenty of trust from both
"That way you can have real transparency, and open up a dialogue
about the spending that is happening - instead of just shaming and
(Editing by Lauren Young and Andrew Hay)
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