How much should my children contribute to savings for college?

Host: How much should my children contribute to saving for college?

Janet Bodnar: I think it is really important for children to contribute to their own college education. Certainly, it will take some of the financial pressure off you and they will also appreciate it more if they have skin in the game. One of my regular correspondences to my money smart kids column is always saying it is very important for kids to have skin in the game and this is certainly important when it comes to college. I think the decision, the whole college decision needs to be a family decision to begin with and you need to do it before the kids start applying because they will just assume that they can apply to any school they want to and you are going to pay for it. Now, if that is not the case and it should not be the case, even if you can afford it, they should be contributing some of this. You got to sit down and say, "Look, this is what we can afford. You can go to any, let us say, in-state public institution that you want, but if you want to go to a private school or if you want to go to out of state, you are going to have to contribute to that because we can afford, we can swing the in-school public education but we cannot do the out of state school. That is going to be more expensive.

" So, this is what you are going to have to do. So, it maybe that the kids have to take on student loans or it maybe that it has to come out of their own savings or out of their own earnings. I think at the very least, kids should be paying for their own miscellaneous expenses while they are away at college. So, they should be having a summer job so that all the beer and pizza money that they need when they go back to school comes from them and not from you and I think that is really at a minimum. I think that nowadays, of course, a lot of students spend even more as far as student loans are concerned or they have work study programs or again, they work while they are going to school. In anything like that I think it is really important because again, it alleviates some of the pressure on you and it makes the kids appreciate more the money that you and they are spending on his education.