Protect your nest egg when paying for kids’ college

Balance. That’s the word I think about when contemplating how families need to think about education funding.

It’s important to strike the right balance between funding a child’s near or longterm future and your own financial independence.

When children are toddlers, that might mean whether your family can afford to have one parent stay at home. When faced with this choice, you need to account for the loss of potential earnings (and retirement contributions) and the cost of day care or babysitters.

As children get older, the case for putting their education needs first is compelling. According to research from the Federal Reserve Bank of St. Louis, the amount of money earned over a career increases with education.

On average, those with more education are able to retire earlier and they are consistently less likely to become unemployed during their careers.

According to the research, average lifetime earnings for a high school diploma are $1,777,152. For a bachelor’s degree, it’s $2,683,824.

These numbers might encourage you to pull out all of the stops when it comes to funding your kids’ education, but the tricky part is that you still need to take care of yourself. After all, there are myriad options to help fund college: financial aid, scholarships and loans. But none of these are available for your retirement.

So where to start? As always, the best bet is to create a game plan that incorporates education and retirement funding with other cash flow needs. You may want to plug in some numbers for college, but prices vary dramatically.

As you begin to investigate the options, note that there is a big difference between the published price of tuition and fees and the price after grants and scholarships have been applied.

Schools now use “net price,” which is the average price students pay, including tuition and required fees, books and supplies and room and board, after accounting for grant and scholarship money received. The national average net price for a public school is $12,272, while the national average net price for a private school is $21,778.

With that information in hand, you may joyfully discover that you can fully fund both education and retirement, but it’s more likely that you’ll need to make tough choices. Your research should also be able to reveal whether education decisions will saddle young graduates with debt burdens that prevent them from buying a house or attaining other goals.

With the money plan in place, it is also important to communicate with your kids.

According to Beth Kobliner, author of “Make Your Kid a Money Genius,” the conversation should start early.

“Talking with your kid about college when he’s a freshman in high school — or even at the end of eighth grade — may seem premature. All that stuff will work itself out in a couple years, right? Think again. The financial aid and college admissions process will be stressful no matter what, but waiting will only make it worse. By not talking about your kid’s college possibilities and your own expectations now, you could end up disappointing him (and let’s face it, yourself ) down the road if he’s thinking one thing and you’re envisioning another.”

If you’re the introverted type, you likely think people with whom you interact at work don’t like you. You likely are wrong.

A study conducted by researchers at Cornell, Harvard and the University of Essex and published in the Association for Psychological Science, looked at our perception of how liked we think we are in the course of having conversations.

The findings uncovered that the shyer you are, the larger the gap between how much you think you are liked and how much you actually are liked. So, if you are very shy, and prone to avoiding interactions, you will rank yourself as much less likable than others do.

According to the authors, “Our research suggests that accurately estimating how much a new conversation partner likes us — even though this is ... something we have ample practice with — is a much more difficult task than we imagine.”

Study participants were asked to conduct conversations with each other. The participants, extroverts as well as introverts, almost always said that they were liked less than they actually were. Also, the liking gap occurs for men and women equally and it seems to persist no matter the length of the conversation.

Yale University psychology professor Margaret S. Clark, said: “We’re self-protectively pessimistic and do not want to assume the other likes us before we find out if that’s really true.”

This is an incredibly self-limiting viewpoint that can easily turn into a vicious cycle of negative reinforcement. Your belief that you are not likable inhibits your attempts to put yourself out there, which in turn reinforces your belief.

This is especially dangerous if you need to communicate as part of what you do professionally. For example, you may need to speak at conferences, present your ideas or simply try to connect with co-workers, colleagues, customers and business partners.

I’ve seen this time and again in my work coaching people on public speaking. I recall one case where someone I was coaching on presenting to a camera was asked to role play. The setting was nonthreatening, a room with six other people and an unmanned video camera.

Halfway through his presentation he stopped cold and said: “I just cannot do this anymore. I’m messing up. I can tell. I want to stop.”

I asked the other students what they thought and every one was of the opinion that he was killing it. “No way,” he said. “You’re all just trying to make me feel better.”

So, I played back the video. He was polished, well-spoken, calm and perfectly composed. You couldn’t tell anything was wrong.

“I don’t like looking at myself,” he said. “I’m not good on camera.”

It’s astonishing how we bend the truth to fit our narratives, even when it’s staring us in the face.

Much of how we think we are perceived is a fiction that we create in our heads. It’s based on artifacts of an image we have of ourselves that, in turn, are based on our worst fears and our weaknesses rather than an accurate reflection of ourselves and our strengths.

It typically goes something like this: “I’m shy. That’s just who I am. Therefore people don’t like me or what I have to say.” My student couldn’t see his composure and authenticity.

It’s human nature, and even the most experienced presenters and performers deal with it. Even after three decades of presenting regularly to audiences of thousands, I still look at videos of myself with an eye toward details and imperfections that likely would be lost on my worst critic.

The only way to reshape this self-image is to take every opportunity to put yourself out there and create more experiences that reinforce the positive aspects of who you are and how you come across.

As for the the quirks and idiosyncrasies, well, I hate to tell you this, but they will always be there. Your job is to look beyond them to what does work, your strengths and then amplify these. Yeah, I wish I had an easier way for you to develop an accurate self-image. I don’t. It takes commitment.

Those of us who are shy and introverted have the distinct benefit of also being more critical of ourselves than we should be. That can create anxiety, which isn’t pleasant, but at the same time it can provide the greatest impetus to grow and improve.

At the very least, the next time you are meeting a new client, talking with a co-worker or presenting an idea at work, remember that the people you are interacting with probably like you.

Thomas Koulopoulos is the author of 10 books and the founder of the Delphi Group.

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