Last week we talked about how families are seriously overdue for some candid, in-depth conversations about the costs and benefits of higher education. You can read Part 1 HERE.

Part 2 of College Funding: How do you Finance a Dream?

Following are some of the key considerations to help you begin or continue the conversation: for you, for your child, for your family.

For richer or for poorer, avoid the “blank check” approach. I’ve placed this one first because it strikes me as the biggest issue I see as I meet with parents who are planning for their children’s education. I feel strongly that parents should avoid the temptation to ever tell their children that a blank check awaits them for any education their hearts desire… even if the funds are readily available to make that promise.

At first, this advice may seem counterintuitive; one of those aforementioned sacred cows. If we have the wherewithal, why would we deny our children whatever education they need to make their way in life?

The crux is that word, “need.” In terms of lesson-learning, I believe it can be ill-advised on many levels to tell your children that money is no object in their decision-making, whether it’s for higher education or anything else. Even if the money is there, you are missing a great opportunity to discuss “wants” versus “needs” with your child – in this case, what an education is worth and what you are willing to pay for it. Given how they’ve managed spending on their own children, even multi-billionaires Warren Buffett, Bill Gates and Jack Bogle would likely agree with me on this!

If your wealth is not boundless, be particularly mindful.

Particularly for parents whose wealth is not boundless, the blank-check mindset can be disastrous for parent and child alike. One thing I’ve learned through my conversations is that, if you offer to pay for an undergraduate degree carte blanche, you are steeply increasing the odds that your child will choose the most expensive college to which he or she has been accepted. After all, the most expensive school is usually also the most prestigious with the best amenities. It’s also the one you’re probably bragging to friends and families about when your child gets accepted there. Guess what subliminal message that’s sending to Junior?

Bank of mom and dadI generally recommend approaching the subject by informing your child that you have only a specified amount to contribute to her total education, and inviting her to explore with you the best ways to allocate that amount wisely. Even the child whose parents are able to entirely fund his undergraduate degree may be required to pursue a graduate degree to achieve his career goals, which can easily set him back a few more years and $150,000 or more. So he begins his career after postponing his salary-earning years and burdened with heavy debt.

By telling your children upfront that you’ve set aside “X” dollars for their entire education, you and they can consider upfront how best to allocate it between their undergraduate and graduate degrees.

Start planning – in detail­­­ – sooner than later.

Begin your conversations with your children early, based on their individual interests as well as your realistic abilities to financially assist them. Speak with them about choices you should make together, such as where they’d like to go, where they can realistically afford to go and how much each of you can and should expect to contribute. Show them (in raw numbers) how their particular school choices will directly impact your and their own expected financial outcomes as well as their educational success. Avoid platitudes and vague generalities; concrete planning and hard numbers offer your best opportunity for solid results.

Make the education planning educational.

Who says your children have to wait until they go to college to begin their higher education? Use college planning to teach your children how to consider and establish sound financial habits early on. By engaging them in a family/team approach to the challenge, you’ll not only help them assess their near-term goals, you’ll provide them with lifelong critical thinking skills.

college: it's your futureI think it is prudent to meet the educational needs of your child. My wife and I are committed to this ourselves. But I also believe that choices for which university your child attends should be based on more than just the enviable location, sweet dorms, top-notch food courts, or the ability to hang out with their friends. Those aren’t needs; they’re wants. You owe it to your child and yourself to help them understand the difference well before the first day of classes begin.

It’s also a great time to discuss with your children how they will contribute to their educational costs, such as through applying for loans, work-study programs, grants and scholarships, and/or selecting a good school offering more financial aid over a better one offering less. It also gives you the opportunity to impart vital lessons, such as how to make the most of their investment in education because that’s how best to consider the dollars spent.

Read Part 3 of our series: Paying for College: Take a Pragmatic Point of View