Imagine if you will…you’re shopping for a home. You find it. You tour it, you think it’s within budget, your spouse falls in love with it. Your spouse becomes emotionally attached…and so do you. Now imagine that after looking at the printout, the closing costs, monthly payment, and every other factor necessary to buy this place is out of your price range. Uh-oh. Did I make some kind of mistake? What do you do?

You were pre-approved for it. 

You did the math in your head. 

Your co-worker who makes the same salary as you just bought one down the road, for even more money!

How is this possible?

More importantly…what do you tell your spouse? And how?

You’re faced with 2 options – move forward and find a way to make this work, or say goodbye to the dream home. 

Either way, you’re disappointed, and this situation is a brutal one. You’ve made the one mistake you cannot make, and you need to know if you can right this ship.

How This Applies to Paying for College

Unfortunately, it happens way more in college planning. Parent tours college with child before knowing how parent and child will pay for said school. Child falls in love with school. The child finds out he/she is accepted to school.

Child begins to think…it’s happening. 

Then the financial aid package comes rolling along. And mom and dad are clueless how they’re going to make this work. 

I saw this firsthand, but on the backend, unfortunately. A couple and child came in and approached me, stating how they were over $250k in college debt because they choose a school and figured they’d “make it work,” only to find it completely disrupted their lives. 

Managing Emotion in the Buying Process

I’d say you cannot get emotional in this process, but everyone knows that’s impossible to do. Home-buying, college searching, leaving a job for another one. These decisions are all driven by emotion, but they also have financial impact. But isn’t there some power in the idea of background work before doing one of these things? 

Yes…there is. If the spouse in my home-buying example had known that the home was a financial impossibility, could he/she have fallen in love with the home in the first place? If the child and parents I had met with knew that the net cost would’ve meant $250k of debt, would they all have continued down the path? 

We may not be wired to think emotionally more so than rationally, but we learn to make buying decisions emotionally. Think of your most recent discretionary purchase. Then think of your most common discretionary purchase in the last month. To be clear, I don’t consider something you’re forced to pay (such as taxes) to be a purchase. For me, it’s often basketball shoes. I only buy one brand, and that’s Puma. I’d be lying to you if I said I don’t have an underlying loyalty and attachment to the brand. One could argue it’s irrational and emotional. Do I need a new pair of Puma Basketball sneakers? No. But I feel good when I buy them. 

It’s a dangerous feeling – because it’s something I know I can afford. But at what cost? 

And to me…that’s the million dollar question – at what cost? The mistake we’ve made is we’ve let emotion cloud our rationale.

The Mindset We Need to Have

When you say yes to something, you’re saying no to something else. So are you okay that your child is going to the school of his/her dreams when it could mean delayed retirement for you, or junior living in your basement for a while? As long as you know that’s the case, then there isn’t a problem here. But you should know that. 

I’ve talked about it before – finding a college entails social, academic, geographic and financial fit. If one of those is missing, you’re probably set for a very expensive mistake, among many other potential problems. If you can avoid this, why would you not try to avoid it? 

Have you ever shopped for a car? It’s a brutal process, right? You walk in feeling like you’re going to get raked over the coals. There’s a reason why “used car salesman” has the reputation it does. So if our guard is up then (which it should be), why is it not up when shopping for college? If you were buying a nice used car, or new car, every year for four consecutive years, shouldn’t you have you guard up?

Your Homework

If you’re currently looking at colleges, understand this is a group effort. You must be aware of the importance of college choice. The most expensive mistake you could make isn’t just financial, but it’s also one that could create tension between you and your child. Sports agents don’t just get their clients the best money deal, they work with their clients to consider all factors involved. I try to take that same approach with my clients. Consider everything in front of you, and shop wisely.