College costs: Have the talk about financial literacy now

Two kids, two college tuitions. Add it up: One very big college bill.

For families like John and Ellen Wong of Sacramento, paying for college is no trivial expense. With two teenagers heading to campus this fall, their total annual tab is about $66,000.

That’s roughly Ms. Wong’s entire annual salary as a public high school instructor.

“We’ve been saving since they were babies,” said Ms. Wong, who added that the couple are determined to get their kids through college without relying on student loans.

That’s no easy feat at a time when college tuition is soaring and student debt loads are crushing.

Not surprisingly, the financial burden is hitting even affluent families. According to a recent Wall Street Journal report, the largest growth in student debt between 2007 and 2010 was in upper-middle-income families, those earning $94,500 to $205,000 a year.

How to ease the pain? As thousands of college students nationwide head to campus this fall, here are some Finance 101 notes:

HAVE THE TALK

  Sit down and talk clearly as a family about who will pay for what. What you want to avoid is a tearful phone call home that your freshman has drained the bank account or overdrafted the debit card.

In some families, Mom and Dad pay for basics (tuition, food, monthly allowance) while students cover the rest (off-campus meals, clothes, entertainment).

“Each family needs to have those discussions, depending on their finances and what they can afford. You need to be clear,” said Donna Bland, CEO of Golden 1 Credit Union in Sacramento.

This summer, Ms.Bland had her son, who will be a freshman at DePaul University in Chicago this fall, start buying his own essentials at the grocery store, just to get a feel for what things will cost once he’s on his own.

“I want him to have a stake in it. There are so many basic things," she said, such as  toothpaste and  laundry detergent , "that a student will need to buy on their own.”

For the Wongs, it’s a little dose of financial tough love.

Beyond paying for two tuitions, housing, and meal plans, “I have no intention of putting more money into their accounts. If they suck it dry, they’re in trouble,” said Ms. Wong, coordinator of the honors humanities program at C.K. McClatchy High School in Sacramento.

The Wong siblings – Nolan, 19, a University of California, Berkeley sophomore, and Delaney, 17, a University of California, Santa Cruz freshman – are expected to pay for their extracurricular expenses, whether it’s joining a fraternity or buying concert tickets. They’re also buying their own textbooks.

To do that, both got summer jobs. Nolan earned $10 to $15 an hour as a dog washer for a local pet groomer; Delaney took home $8 an hour — after taxes — as a birthday party host and snack bar attendant at a children’s park.

When they land at college this fall, they’ll each have about $4,000 in their bank accounts.

“Books are a priority; incidentals come second,” said Nolan, who said his only indulgences as a freshman were off-campus burgers and baseball caps.

Last year as a freshman, Nolan paid for all his textbooks, including about $490 for his two chemistry classes. Whenever possible, he bought used books and compared prices online at Amazon.com.

This year, the molecular toxicology major is saving roughly $900 a month by living in off-campus housing with a minimal meal plan. He’s also bringing a rice cooker for making dinners with his roommates.

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