“The easiest option is to say, ‘We'll figure it out when the time comes,’ which isn't necessarily a plan. To me, it's a hope.”

For most couples, the sticker price of college never gets a number attached to it out loud. At least, not until an acceptance letter forces the issue… which is exactly the wrong moment! Our hosts, Natalie and Dan Slagle, break it down in this Money Date.

Campus visits, admissions decisions, financial aid offers: these arrive stacked with emotion, and emotional timing makes for bad negotiating, whether the negotiation is with a spouse or a newly admitted teenager.

Dan and Natalie offer a framework built on seven questions to prepare for college finances. It dives into such things as what resources actually exist, what your cap is, and whether your child should have skin in the game when it comes to covering expenses.

Then, we’ve got harder questions. What happens to a scholarship's leftover money? Who absorbs the cost when a teenager falls for a school above budget? What actually belongs in "the bucket" beyond tuition nobody quite budgets for? And finally, when and how does a family tell a teenager any of this, in a way that reads as shared strategy rather than burden?

None of it is complicated math. It's a conversation most families never have out loud… until they're forced to.

Key Topics:

• Why the Money Conversation Gets Skipped (08:17)
• Question One: What Resources Do We Actually Have? (12:38)
• Question Two: What’s Our Cap? (14:56)
• Question Three: Should Our Kids Have Skin in the Game? (21:59)
• Question Four: Where Does the Scholarship Surplus Go? (27:46)
• Question Five: Who Pays When Our Child Goes Over Budget? (34:00)
• Question Six: What's Really in the College "Bucket"? (36:22)
• Question Seven: When and How Should We Tell Our Kids? (39:15)
• Recap and Wrap-up (42:12)

Resources:

• Check out our blog post for an easy way to copy and paste the conversation prompts for your college money talk!: https://www.fyoozfinancial.com/moneymatters-blog/the-college-money-talk-7-questions-married-couples-need-to-answer-before-the-campus-tours-start
• NYT Article: Parents’ Financial Support May Not Help College Grades: https://www.nytimes.com/2013/01/15/education/parents-financial-support-linked-to-college-grades.html

Schedule a Free Consultation: Go to https://www.fyoozfinancial.com and click the button in the upper right-hand corner

Join our newsletter to stay up to date on the latest financial resources: https://www.fyoozfinancial.com/signup

Natalie Slagle, CFP® and Dan Slagle, CFP® are the founding partners and lead financial planners at Fyooz Financial Planning https://www.fyoozfinancial.com/ — an independent firm dedicated to helping high-earning couples in their 30s and 40s confidently navigate the complexities of managing money together.

At Fyooz, they specialize in turning financial stress into strategy, guiding couples through everything from cash flow and investing to aligning money with shared goals.

Disclaimer: For updated disclosures, please visit https://www.fyoozfinancial.com/

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There was research done from a sociology professor named Laura Hamilton from the University of California, and she found through her research that greater parental contributions were linked with lower grades across all of four-year college institutions.

I believe it.

Welcome to Money Dates, the podcast that makes money conversations with your partner feel a little less taboo. I'm Natalie Slagle, a certified financial planner, and I'm joined by my husband and business partner Dan Slagle, also a certified financial planner. Say hi, Dan.

Hello.

In each episode, we'll share honest stories and practical tips to help you and your partner feel more connected and confident on your financial journey. So grab your drink, get comfortable, and join us for our money dates. Hello, Daniel.

Natalieel, how are you doing?

You tried to make that work. It didn't work. It didn't work. What do you mean it

didn't work? It worked. Some child out there is probably named Natalieel.

Probably cool name, cool name. But here we are. We're recording again, and you're like,

all right, let's move on. Or

move. This did not land. I'm trying a new camera angle today. I was told that I need to. It looks

good.

I like it.

What do you have for photos in the background? There, you're showing a new photo for those who are are watching this.

Yes, photo number one is a cool tennis court, and Dan and I did not like grow up playing tennis, but I have gotten into tennis lately. Which my next round of lessons are coming up in a few weeks, so I'm pumped about that.

Did you put it on the family calendar? It is

on the family calendar.

Okay, I think.

I think I always love to ask couples like, how do you navigate your calendars and like keeping each other updated? Because our work calendar is also our personal calendar, and so our employee Jessie, she knows exactly where we are at all times, whether it's work related or not. And I'm like, at this point, I don't care. Jesse knows everything about our life, but it is kind of funny.

Well, the reason we have to do that is because we need to block off our calendar, like working hours or non-working hours for certain events. And you know, like tomorrow, our daughter has a dentist appointment at eight a.m.

Oh, we need to talk about that. Can you take her?

Yeah. Okay. Let's talk about that offline.

Now I want to talk about it online. So you say yes, and you can't say no. Oh, actually, but if I have to drop her off, see how do couples do this? Ooh, I don't know. We we are a one car family. We

are a one car family. So I feel like that adds a lot of complexities into who does what with our child, especially if the other person has, you know, a meeting or another obligation.

Yes, our friends who've actually been on this podcast-I won't say who-but they recently got a some electric bikes, and I'm I'm blown away. I'm like, where do I sign up? Instead of us getting a second car, we can just get an e-bike because a lot of our shopping and daycare drop-off is all within like the two-mile radius or something. So we don't have to go that far, but far enough where we can't walk absolutely everywhere. So maybe that's on the horizon.

Maybe, maybe if you have a good second half of the year-not business-wise, but just being a good person-maybe there will be a nice holiday present coming your way.

I feel like you're parenting me, and I do not appreciate that.

I'm parenting you

if you're good. If you're a good little girl, Natalie, you can get your e-bike. Speaking of parenting, this is going to be my really bad segue. We're going to talk about college planning and all the parental decisions and discussions that come along with it. But this is exciting. I feel like we're getting better and better with this whole podcast thing because we have planned ahead the next two episodes are dedicated to college planning. We're going to have a conversation today about the money conversations that you all need to be having with your partner before college visits and college firming up that decision happens. So today is kind of more so about the conversations and what you all need to kind of know and be on the same page before you're making a decision with what college your kids are going to go to. But our next episode, little teaser, we actually have a guest on an expert. In college planning, to talk to our guests, especially our high earners out there who aren't going to qualify for financial aid, about just some of the thoughts and strategies when you don't qualify for financial aid, some of the things you should be thinking about going into these conversations and college visits and all of that, but we were like, "Well, I feel like there's conversation to be had before we have the expert on. So we're doing two episodes of the same topic, kind of. And I'm-I don't know-I'm just like proud of us for planning, and I hope people will really like it.

You're one step closer to to the e-bike.

Yay! I'm doing it, and of course, if you have a friend, a family member, a coworker who has a kid in high school, you need to send them this episode and the episode after. Of course, just tell them to hit the subscribe button, and that way you and them can all be joyous in your college planning and other financial endeavors together. So,

so good, so good. Where do we start?

Where do we start?

You tell me where we start. You're the one who's so excited about these topics. Let's go. Where do we start?

Oh well, the last thing I was going to say, and it's so funny because remember how in our last podcast, for those of you who listen on an ongoing basis, thank you by the way, I was like, "Oh, we should start teasing them, Dan, about the work we're doing, kind of for our business. So the only other thing I can say is that we have been working with the brand strategist for our business and for our podcast for a while now, and I told him that we started to reveal this, and he said, "Zip your lips. You cannot say anything else. That is the most you're going to say. Is that you're working on something? And so, sorry, everybody. I've been told that I need to zip my lips a little bit and just keep you all posted on when the big reveal is going to happen. But there's some really cool things coming down the pipeline. Was that fair? Am I in trouble?

No, no, no. You're good. You're good. You're totally not in trouble. I, I'm glad it came from him as opposed to coming from me because oh, if it came from you,

I probably would have been like, you can't tell me what to do. We pay him to tell us what to do. So I, and that's the thing with most couples. Like you don't listen to your partner, but you pay someone to tell you the same thing, and everyone will follow along. It's always

good to have a third party unbiased, a third party unbiased person. It's the same thing. It's good to have a third party in these conversations to help mitigate any tension that may arise. Not that we are having tense conversations all the time, but it is, and I shouldn't say unbiased because I feel like he, you know, obviously has some interest in in how things play out from a revealing standpoint with our our new brand that we have been working on. So you know, we trust his opinion, and that is all we're going to share for right now.

That's it. All right, let's get into the episode. We're like way past. I always say like, okay, five minutes max, Natalie, of small talk, and our little timer says it's been past that. We'll see what gets kept in and what what doesn't. But Dan, your turn.

Okay. All right, you're just rambling now, so let let's get into it. So let's first talk about the topic today: is conversations to have before your child goes to school, right? Go goes to college, and I feel like throughout our work, most couples have never actually said $1 figure out loud to each other about college and college costs. I feel like most couples, and it's likely the easiest option. The easiest option is to say, "Well, we'll figure it out. We'll just figure it out when the time comes, as as we get closer. Which isn't necessarily a plan. To me, it's a hope, and we see this a lot. We've talked about in previous podcast episodes about college costs, where they may land when your child turns 18, if that's the age they they decide to go to school, and how to be more proactive in in planning around it. I feel like the risk of skipping this whole process of developing a plan and sticking with the plan, decisions tend to be made emotionally. Would you agree?

Yeah, absolutely. Especially because now your kids are teenagers, so they're in the mix. Because I like, it's just really. I'm thinking about this conversation, and I'm thinking about we have clients who have really young kids, right? Maybe let let's say like six and under, and then we have clients who attend 10 and plus, and the 10 plus, you know, they might start to have opinions, especially the ones in high school on this whole thing. So it's not only you and your partner's opinion, but it's the kids' opinion too. That again just gets wrapped up in all of these emotions, which is why we want to lay out this. Framework of questions that everyone should be asking,

right? And the decision gets made emotionally, not in the ideal time, most likely. If you keep delay, delay, delay, delay, procrastinate, whatever it may be, if you delay it, for example, like during a campus visit or after an acceptance or rejection letter, which may lead to choosing a different school. I feel like that's the worst possible moment to negotiate with your partner in terms of costs, or and even worse, like especially if your kids getting older and older, and like going through college visits and and receiving an acceptance or rejection letter. That to me seems like also a bad time to negotiate with your child on what you're going to provide from a monetary standpoint to help pay for higher education.

Yeah, exactly. Because what happens if the school you did get accepted to it wasn't the top choice? It also is more expensive, and so now it's like I guess we just go there, and I guess we just we never set a boundary, and so now we're going to fork over more money because it was never discussed. And my child's really sad that they didn't get into the ideal school with the ideal price tag, and so here I'll just pay for this and make you feel better. Like, not not the situation anyone wants to be, which is why all these conversations need to be happening before the letters acceptance or denial comes through.

So in this episode, I think what we should focus on for our listeners is giving them the framework or the questions that we want them and and their partner, their family as a household to answer and go through together, right? Like I feel like that's one of the main objectives. And and again, don't don't worry about trying to memorize this. Obviously, if you want to keep playing it and increase our our stats, that's totally fine.

But play it 1000 times. Instead of

doing that, we will actually provide some notes in an outline format in the show notes that you can actually just copy and and paste for paste for your own conversations at home.

Yeah, because having that worksheet and we're going to have seven questions, right? So having that worksheet, seven questions plus some sub questions within it, having that lead the conversation with you and your partner helps take the pressure off of either one of you, and the focus is on what is the question, and let's answer it together. So it really creates this conversation that the two of you tackle together, rather this combative conversation that can evidently happen when we talk about money.

All right, you got the first question.

Question number one: What resources do we have to pay for our children's higher education? And so, what I want you to do, listener, is to lay everything out. So, number one, especially for our high earners, is cash flow. A lot of our clients with kids in college right now, they they pull things out of the 529 plan. Once that's done, they can actually just afford to pay it via cash flow. Great. Maybe that's an option for you. Maybe it isn't. You'll have 529 plans, as I just said. You might have an UGMA or an UTMA custodial account. Your your own. So you, as the parents, your own brokerage accounts, and maybe even Roth IRA withdrawals. Again, this would be from the parents, and this would want we would want it to be contributions, not earnings, because the contributions could be withdrawn penalty free for qualified education expenses. But obviously, all of our alarms go off when when we talk to clients and when we think about taking distributions from the retirement bucket because how do those distributions impact your own retirement goals? And so that between the brokerage account and the Roth IRA, once we start tapping into maybe a bucket that isn't earmarked specifically for college, and then we need to really start to do the analysis of how does this impact us, and are we okay with this impact?

Okay, so it sounds like what should be done then is just like like with any financial decision, big or small, you should always start with taking into account your financial inventory, let's call it, or your balance sheet, but in addition to cash flow, as as what you described as like the the number one area you should focus on, especially if you're a high earner,

right? Exactly, and we'll talk about this a little bit later. But the cash flow could come into play on things that maybe you have a solid 529 plan, but there are expenses when your kid goes off to college that are not going to be qualified distributions from a 529 plan. So cash flow might have to come in regardless of what the savings buckets have, kind of depending on what qualified expenses are and what the expenses your kid has.

Okay, so question one more so leads into financial inventory. Question two that I would propose as as are these in like a hierarchy? Would you say?

No,

not necessarily. Okay, okay. Question two for me would be what is your cap? So thinking about this isn't what is your cap isn't technically what can we afford. I think that's part of it, but more so it's what are we willing to afford without causing any sort of resentment? Whether it's between you and your partner, or God forbid, you have resentment for your child, but that could probably happen too. Or sacrificing like your own financial goals that you and your partner have set up, right? So if if you're thinking about drawing from some of the accounts that you listed that aren't designated for higher education, what does this do to some of the other goals that you've been working on as a as a couple yourselves? For example, maybe your cap is, gosh, in today's dollars. What does our analysis say right now? Like little over 30,000 is the average in state tuition, public in state tuition. Let's just roll with 30,000. Let's say like 30,000 per

year.

Per year, thank you. So let's say your cap is 30,000 per year, and maybe your cap, as you talk through it, is like whatever it takes. We're going to do whatever it takes to pay for a four year degree because the numbers don't matter to me, and there is no way, like I want my child to take on debt as they they're in like their very early 20s when they graduate.

Right.

That's also part of it, which we'll we'll get into later in in some of the other questions that that we have proposed. Thinking about like how much do you want to fund as parents, and like do you want your child to have any part in the funding? Which, which again, we'll get into a little later. So, I think some like discussion prompts for couples to answer together with question two again. What is your cap? Is thinking about it. Is this a per child cap or a household lifetime like total. So thinking about it in the context of is it 30,000 per year, or is it for example like 100,000 per child is like the household lifetime total?

Yeah, or maybe it's 100,000 for all of our children. Because if it's 30,000 per year, 120 grand, and then you have two kids, now your your household pot is 240,000, and people have more than two kids, and like that pot gets really big, and again, some of this the even though the dollar amount might be a lot. That doesn't mean you can't afford it, and that's why for some clients they have said, no matter what, our kids are not walking away with debt, and they can afford that statement. But again, I really like how you how you were talking about this, Dan. You're talking about resentment. There could be a partner on the other side of that that says, "Yes, like we have plenty here, but I really wanted that boat that was 100 grand, and I was going to pay for that this year. Now I might need to wait a couple years. I'm just like making something up, but like you got to talk through these things of what does paying for college per child, right? And this is why it's really important to have these conversations, especially with kid number one. So you kind of have it set for the rest of them. But how does this impact your own personal goals? And

I don't live on a lake. I don't have waterfront property. But if I was going to decide whether I'm gonna want a boat or pay for my child's education. I I think you know the answer to that.

You would pick the education. I would consider the boat. I'd be like, I gotta go test drive the boat to really make a solid.

You're you're such a poser. You you don't you don't like boats. Yeah, get out get out of here. Okay, so

we went on a pontoon earlier this summer, and I was like, "This is enjoyable. I like this pontoon.

It was enjoyable because you were not driving the pontoon; you were just sitting in the pontoon, having a beverage and eating snacks. Like that's yeah, who doesn't like a pontoon in the summer with that? That's what I'm saying. It would be

it wouldn't be this easy decision for me, Dan. I'd be like, gotta try. All right, all right, all

right. Anyways, enough of your your boat rant. So let's talk about some sub questions off of again, what is is your cap? So we talked about is thinking about it is is it a per child cap or a household lifetime total cap? The other questions I would propose in this conversation is does the cap flex by the number of kids that are going to be in college within your household simultaneously,

ooh, those are big years. Those are when you have those are you think

you think? I mean, well, I was going to say you think daycare with multiple kids is is big,

and it is

college. Yes, as I was thinking that thought before I actually said it out loud, I was. Like actually, it's kind of it could be potentially comparable. That's one question to consider, especially if you have kids close in age. And then thinking about the the last sub question I'd throw out there is is the number the same? Is the cap the same for every child, regardless of the school, the quality, the major, or the potential ambition that you you see in your child,

Danny Slagel. That's a little bit the ambition part is a little bit of a risque question in in our line of work because what I think it's true, but I I would really wonder and I don't know because I don't we only have one kid and she's not old enough. But if you had a high schooler who just worked their butt off to get great grades, and another high schooler who they did okay, C's get degrees kind of thing. Are you going to give more money to the the kid that got all A's versus the kid that didn't try so hard still wants to go to college and maybe has their eyes set on like the cool fancy colleges that cost a lot. Like, does that does your child's ambition sway how much you give each kid, or does that muddy the waters too much and you're like, nope, everybody gets the same amount of I don't know. That's for every parent to decide. I don't know. I don't know. What would you do in that decision, Dan?

Put me on the spot with our imaginary second child right now. I might flex the cap a little bit if a child's showing some more ambition and and getting good grades.

There is something of like there's some merit there, right? Like if you're going to work hard, do you get more for your hard work? Is there a lesson to be taught, and which is why maybe some of this conversation is important to have, like in middle school? I don't know. I mean, of course, the answer is yes, but

yeah. But every parent is going to make their own decision. But these are legit scenarios that you need to consider.

Absolutely. Okay, let's go to to the third question. Still, this kind of similar vibe. Do you want your kids to have skin in the game? And I was so happy that I found this research in preparation for this podcast. So now I'm the stat girl. Boom, boom, boom, boom. There was research done back in 2013. Now I get it; it's old research, but just stay with me here. Okay, so from a sociology professor named Laura Hamilton from the University of California, and she found through her research that greater parental contributions were linked with lower grades across all of four-year college institutions, I

believe it.

You believe

it? Yeah,

I believe it, but I'm like still a little surprised by that.

I'm not surprised if someone's paying your your way, especially if you're at a school that maybe you you know you have to take classes that like the the basic classes you know that like everyone is required to take, and maybe doesn't fit your interest into what you truly want to study. I could see potentially lower grades in like those areas for sure. Those classes for sure. If someone's paying some of your way,

isn't that what happened to you? Like your worst grades was in like.

Don't put what I don't remember my my report card in. I've said that

you were like, I didn't do good in theology or something.

It wasn't theology for listeners. We both did attend a private university, and those are some of the classes I was talking about. Was like theology if philosophy was required.

Oh, so much. Yeah,

those were the classes where I tended not to do the the best at because I just thought it was more important to focus on the area that I, the other courses I was taking were were challenging and actually like fit into my major, whereas some of these other ones were just a requirement to graduate.

Sure, sure. So this stat, according to Dr. Hamilton, it's a modest effect, not big enough to make the kid flunk out of college. She also said, but it was surprising because everybody has always assumed that the more you give, the better your child does, and that's just not the case. Dr. Hamilton found that the students with the lowest grades were those whose parents paid for them without discussing the student's responsibility for their education. Wee wee, which is why we're having this podcast. Really cool. Okay, parents could minimize the negative effects if you are going to pay for college by setting clear expectations about grades and progress toward graduation. So I just thought this was really neat. There's a a really good article in the New York Times about this. So we will provide that article in our show notes if you want to look into it more, because it's I found the article itself actually pretty pretty fascinating. Anyways, do you want your kids to have skin in the game? So if the answer is maybe or yes, there are two common models and kind of the only models you could do a percentage base like, hey kid, you're going to pay for 10% of your college. Which could help them. Oh, if I go to the $80,000 a year, that's a lot different than if I go to the $40,000 a year. You know, so I think percentage is is helps you just automatically attribute the cost to the payment that you have, and then of course you could just do a flat dollar amount. So okay, regardless of the cost, kid, you're going to pay five grand a year, or you're going to do work study. Dan, you did work study.

I did do work study. Yep, that's where I learned to to be an expert painter, and I'm very good at cutting when it comes to to painting. So it paid off. I didn't definitely my adult life.

That about you always are like I'm such a good painter, and I've always been like, why does he keep telling me that?

More, more proof that you're just you just don't listen to me sometimes.

I'm sorry. I really try. I don't know if you you've probably told me this that you're a paint. Okay, your work study was painting. Did you paint dorm rooms? We

painted dorm rooms. We painted apartments that were owned by the university.

Who taught you how to paint?

Daryl. I think is that

actually his name?

It was either Darryl or Darren. Yeah, he was just hired by the school. I I don't remember seeing him during the school year on campus. Maybe he was. Maybe he was actually a full time employee at the university. But yeah, he he taught me everything I know about painting.

Wow, y'all! If you want to get to know your partner better, start a podcast. I tell you, the things I learned from doing this is quite impressive. Okay, so is your kid going to have skin in the game? Present those two different models: percentage based, flat dollar amount. And again, if the answer is yes, is this expectation that they're paying tuition only? Because I think the work study, Dan, it like went to your tuition payment directly.

Yeah,

right. Like you didn't pocket that money; it went to your tuition.

Correct.

Yeah. So, is it tuition only, or does it apply to their contribution on the whole cost bucket? Which will remind you what to think about with that. So, like rent, food, technology, phone bills, and again, how do you want them to pay for it? So, during the school year, maybe they have a part-time job, or after, maybe again they'll they'll just take loans out in their name, and so they'll pay for it once they get the the big person job. So, different ways to have skin in the game and being intentional. Because again, a lot of folks, especially those who listen to our podcast and our clients, they might be able to afford a sticker price, whatever that is to them. And so this could be just because you can afford it all. I think there's discussion to be had with everyone on whether you want your your kids to have skin in the game.

I like it. Ready for me to give the next question? Okay, the next question is what happens to the surplus. So I feel like this scenario, if there's some surplus meaning left over, and I'll give an example of what that might look like. I feel like this could be potentially the most contentious question out of every one that we're going to propose today. Here's a scenario going back to our school is 30,000 a year example. So let's say that your child gets a $15,000 scholarship to a $30,000 a year school,

okay.

So with that math, you have 15,000 per year in surplus, right? Following the math, okay.

Yep, yep.

So the question is, where does the 15,000 go in this example? So a few options that you should be thinking about, and again, you you would know this going into your child starting school, so these are some things to to think about, even at most likely at that time. So option one is to keep the money yourselves as parents, right? So redirecting it to retirement accounts, putting it in bank savings, brokerage accounts, you name it. There's a lot of different options out there. The other option that we talked about is like, for example, if you had a 529 being funded to help for higher education, and your child ultimately isn't going to be using it, if you have multiple kids, the likely the best option in this instance is going to be to change the beneficiary on the account and changing the beneficiary to be the child, right? So the second child, or they, yeah. So they could use it for higher education in the future,

unless you wanted to roll it over to the Roth IRA.

Oh yeah, yeah, yeah. All these new, all these new rules. You know, it's just hard to keep track of. Thank, thank goodness,

that would be a really hard decision because you're like, well, but maybe little Susie, who's six years younger, would want that money. So it's almost like you might just just carry the 529 plan, see what the rest of the kids do, and then make a decision.

Yeah, which again, this is why it's important to have a more of a third party unbiased decision in conversations to lay out the options for you and equip you with the information you need to make the decision that's best for for your household. Because the other option, option B, is like you could bank some of the funds for the child who does not need the entire 30,000 per year, right? So you could, if especially if you're funding it from cash flow or like brokerage accounts, bank savings, whatever it may be, you could then dedicate those surplus funds to still benefit the child in the future, whether it be helping for a portion of grad school if that's the path they take, thinking about allocating some of those funds for a future, like a future gift to help with a down payment on a home, pay for like wedding costs, right? Some sort of seed money, seed money. I think of like your parents are going to be the first ones to invest in in your business when you graduate school, but it could be an option, right? So those are some things to consider as well. Option three would just be to to split it, so you keep some as the parents, you put it back into funding some other goals that you have, whether it's retirement or buying said boat, or you could potentially roll some of it over again to benefit the child. I think, yeah, some some questions off of these options that you would also want to consider. Again, the main question here is what happens to the surplus. But thinking through the this scenario, it would be like, does this incentivize the like my child to actively pursue merit scholarships and choose more cost-effective schools, right? Like thinking about like how it might benefit you if they don't need everything if they get a scholarship, or how it would benefit the child, and thinking about like does the answer change if it's a scholarship? Meaning, like in my mind, they earned it, or just by simply choosing a cheaper school, like they didn't spend the money. So earning versus like them actually not spending the money, and thinking about like going through this process. Does well you tell the child about like this rule that you have set up, or your thoughts around the different options available, or wait until after they see acceptance letters or scholarships being given.

Yeah, it always feels like having the conversation before the numbers start coming in feels best, especially if you're like, "Hey, I'm going to pay for 50 grand a year. If you don't need 50 grand a year. In a disclaimer, this kind of depends. Where is the 50 grand? Is it in the 529 in the brokerage mixture? Let's just say it's in the brokerage because that's a little easier for this example. But hey, kid, I'm going to give you 50 grand a year, and you might go to the 80 grand a year, and that means you're going to have for sure 30 grand a year with skin in the game that you're going to pay for, or you can select the $40,000 a year, and then there's going to be $10,000 a year that you get to decide what to do. Do you want me to give it to you every year, and you can spend it and have the best wardrobe out of any other kid in your school, or do you want me to put in a brokerage account for you? You know, it's like I think this one to your point is the most avoided because there's so many decisions happening like people are trying to make a plan around the financial impact and the school selection and like just getting in the door you have to just take that extra step to now think about well what's going to happen with this extra money? Because I feel like most of the time, from living through the eyes of our clients, there's not like this. Hey, okay, we got to do the math and figure out how much we owe our kid because they didn't use everything that we thought they would use. Like that, from a practical standpoint, I don't know if I've ever had that happen.

Yeah. All right, I'm going to play devil's advocate for our next question. Take the opposite end of this. What happens if your child goes over budget?

Okay, they go over budget, and I would think they go over budget, and they maybe you were kind of planning on you were going to pay for everything. Okay, so let's talk about going over budget. So, some discussion prompts: Is the overage the child's full responsibility? Is it split with the parent, or does it require a joint conversation before enrollment? Also, do you allow any exceptions? Well, if it's Stanford, we'll stretch. That's totally fine. Harvard, great. And are both spouses actually aligned? So that would be kind of a hefty conversation. I'm just envisioning Dan, like you and I, are sitting down, our daughters going off to school, and we're like, okay, 40. End of year, that's your budget. And she's like, "Mom and Dad, I've found a school. I love it so much. It's $55,000. And I can see you and I needing to have conversations about that, and maybe not being in alignment because, again, I want my pontoon. I want my boat. And you're like, education is so important.

I swear,

if

we are, if our daughter is 16, whenever we have this conversation, and you want a pontoon, I am going to be so upset.

Okay, I got to get a pontoon when she's in middle school, so I got to make sure that that happens.

Where are you going to store the pontoon, or what body of water? Are you going to put the pontoon on? It's ridiculous.

I'm dreaming over here. Okay, how does this interact with the loans, public loans, private loans that a child can get in their name? Right. So, like, we're going to talk. I think a lot more about this in our next episode about like funding and ways to think about again, like the financing behind all of this, but just having parameters on what happens if they go over budget, and the partners being like, "Oh, they're getting a loan, easy peasy, or let's tell her that the budget's 40, but really, you know, behind the scenes, it's 60. I don't know. However, you and your your partner want to go about that.

Yeah. Next question: What's actually in the entire bucket? And I'll talk about the the bucket here in a second because I I think there's a there's a classic mistake in the conversations leading up to higher education funding, and that's parents think 30,000 a year means tuition, and then you get blindsided by everything else.

Right,

right. So thinking about well, what what else we have tuition and fees, room and board, books, course materials. You know, there's so many so many costs that go into higher education, education in general, higher higher education specifically for the topic of of this episode. So then you have think about like technology, laptop, software licenses, whatever. You know, travel. Like if your child goes to school across the country, you're gonna want to pay for flights home around the holidays during summer break,

unless

your child decides to stay out there. But you're going to want to see your child, so there's there's added travel costs associated with it. There's there's things like phone bills, meals, meals for sure, spending money, even just beyond like the college meal plan. I don't do they. I'm sure they do meal plans still. I did you like our college cafeteria?

I never used it because I never used it. Yeah, because I didn't live on campus because I was at St. Kate's my first year.

Oh, that's right. Okay, okay.

See, you're learning stuff about me. You don't listen. I love the chicken tenders. That was great. I always got me, so I paid for my food out of my. I always had a job in college, so my job was to pay for rent and food, and my roommates. I mean, they're still like my great great college friends. They like still to this day make fun of the food that I would make. I would have like a tomato with pepper on it. I would have like cottage cheese. Maybe I would put cottage cheese on the tomato for like a really fulfilling meal, but like that's that's what I ate. Would love it to have a little bit bigger budget than that, but that's okay.

Yeah, yeah. The other night you put cottage cheese on avocado toast. It was so good. What are you doing? What are you doing? That brought you back. Okay, now I know where that comes from.

I bet there's someone listening who has done that before. It was so good.

No, no one has ever ever done that before, except for you. All right. So the I guess the discussion prompt in in this overall question is is is the 30,000 again in this example, the sticker price, or is it the all-in cap? And again, these can be very different numbers based on all of the various expenses I just provided, and most couples likely haven't even distinguished between them.

Yeah. Okay. Last question. We made it. Question number seven: When and how do you tell your children this whole episode impacts your child, and at some point you need to talk to them about it, and you need to decide when the appropriate time is to talk about it and how. Right. So, what age is the right time? So, I would say early enough where it starts to shape maybe the school list building, but not just like the final decision. So, oftentimes we think these conversations are valid sophomore or junior year of high school, and it doesn't need to be like a. A one and done conversation, right? Like it can be an evolving one. So you just like start to build the talking points so that they know what to keep in mind. And then who delivers it? Is this a both parents sitting down, or does it come up more informally when mom or dad are in the car driving kid home from their soccer game? I don't know. Like again, this is what you got to figure out. And then, how do you frame it? I think this is really important. How do you frame it so it doesn't feel like this huge rejection of their dreams, but instead it's like this shared strategy? Because I think when we've talked to our clients about, hey, talk to us about college and how your parents funded it, if they funded it, and how were the conversations? Most of our clients have always said, "Oh, we we didn't really talk about it, and so I think just having the conversation alone, and again, the framing is important. But I think our clients and most of our listeners will do a good job of this. But like framing it in a way that the tone matters, so that this is us tackling this together. This isn't me giving you a big no. This is me talking about it. This is a really important conversation, and I know I know it can be hard to have sit down serious conversations with teenagers because they are at their friend's house as soon as they get home. But it's important, and that's why you you have these conversations. You you work on this checklist. You put it on the kids' calendar. Whatever you got to do, the kids have calendars. I don't know.

Oh my gosh! Can you imagine? Like, do you have? Oh, I want to know this. If your child's old enough, do you add them to your Google family calendar? Maybe. Wow, I never thought about that.

My good friend, who has 16-year-old, a lot of times she will tell me, "Oh, my daughter forgot to tell me about this event that she had, and so I'm like, "Calendar, like, what? How did? Yeah, but it

also depends on the child remembering to put it in the calendar.

Yeah, yeah, that too, that too. Okay, well, that's it. Those are the seven questions. Can you all recite it back? I will actually recite it

back as a as a quick recap. So, question one: What resources do we have to pay for your children's higher education? Question two: What is your cap? Question three: Do kids have skin in the game? Question four: What happens to the surplus? Question five: What happens if they go over budget? Question six: What's actually in the bucket? And question seven: When and how do we do you tell the kids? So those are the seven questions. Again, we'll put some information in the in the show notes so you can copy and paste it, put it in your own document. Natalie, can I close it out today?

Yeah, do I always

close it out? And I don't know why I asked for permission because I'm just going to do it. I feel like today the episode again. This is not an official like series, but it it can the episodes are going to coincide, right? So today was was about knowing your number, like that's the goal of main goal of this conversation. And then the next episode that we have is really going to be about making that number work harder for you, and understanding how. Yeah, yeah. Did you like that? Yeah, not not bad, not bad. So again, I don't want to like. We won't qualify. The idea of like we won't qualify for financial aid is probably could be one of like the most expensive assumptions that high earning families

make-that's true,

right? Like you just don't know. So again, we're gonna have. Did you say the name of our? No, no. You

tell the world.

Oh, okay. So we're gonna have Jonathan West. Jonathan West is an expert in everything college planning. He's gonna join us in our next episode to unpack why the sticker price and the actual price can be two very different things, and to me, even more important, like why school selection strategy matters as much as the application itself. So I would encourage again listeners to actually schedule the conversation with your partner after listening to this meeting, instead of just listening and nodding your head and being like, "This is this is good, or you share it with your your partner. I you should share it with your partner, I should say.

Yeah,

but there's a lot of follow up. Sit down, have these intentional conversations, and I think that that hopefully will set you up for success as we go through the college planning process. That's it. Thanks, Natalie.

Bye, Dan.

Hey, if you've enjoyed this episode and are looking for personalized financial guidance, schedule a free complimentary consultation using the link. In the description below, Natalie and Dan Slagle are the founding partners of Fyooz Financial Planning, a registered investment advisor. The information provided in this podcast is for informational purposes only, and should not be considered investment advice or a recommendation to buy or sell any securities. Investing involves risk, including the potential loss of principal. Advisory services are offered to clients or prospective clients where Fyooz Financial Planning and its representatives are properly licensed or exempt from licensure. For more information, including our disclosures, please visit our website at www.fyoozfinancial.com.