This past weekend was not fun for me or for the college-bound families I help through my college planning practice -- College Funding Network. The economic problems were the number one topic for the 3 I met with as they tried to figure out how to pay for college in this time of fear about the economy.
What is REALLY sad is that these families are not really being impacted directly by the economic meltdown! They still have their jobs. Their 401ks went down about 10% but the way they were acting you'd think they were wiped out. They still had home equity - although not as much as they had 6 months ago. And they were still planning to spend $1,000 per month in new money for college. They were REACTING FROM FEAR and not FACTS.
They showed me articles from US News and Time magazines that terrified them that there would be no student loans or money for financial aid. I explained that news is general but if THEY ARE IN CONTROL of their cash flow, they will be fine. They would qualify for loans with no problem. That all they need is a "blueprint" to help them build their college dreams.
These were all potential clients so they were trying to decide whether or not retaining my firm to provide the blueprints was worth their money. What was puzzling was unlike previous years, their reasons for "thinking it over" had nothing to do with my company or my qualifications. They were looking for FREE information! One family had been told by a financial planner (not college certified by NICCP) that he would do it for nothing if they bought an insurance product. The other 2 couples were trying to save money by learning all they could from me to do it themselves!
They had been told that they can do it all for free by their high school counselor and the colleges they toured. I agreed that they can do it themselves but not for "free". I aksed them how much time they were willing to spend to learn how to do it correctly. I compared with I did to tax preparation. Sure you can do it for free but do you want to pay an EXPERT to help you or not?
Sadly for these 3 families, FREE had become more important than EXPERT. FREE had become more important than EXPERIENCE. FREE had become so important that they are not thinking logically about VALUE. My job was to show them value but I failed because of the drumbeat of economic worries.
I can appreciate the need to review every dollar they are spending in these times. But the FALSE economy by trying to save a total of $2,400 in fees spread out over 4 years versus spending $100,000 to over $200,000 is mind-boggling. Again, fear versus reality. Sometimes spending money is an INVESTMENT not an expense. Finding an expert to guide you through something as complicated as college financial planning is an investment that should save you 3 times the investment!
I ended my meetings with a written guarantee that if I can't find them every dollar they invest in my services in savings on college, I would refund my fees -- no questions asked.
In these tough times, I agree you should be cautious about how you spend your dollars. Look for experts who are willing to GUARANTEE their services. Look for experience and testimonials. But DON'T LET FEAR drive you to make financial decisions that FREE looks better than results.
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