A Suze Orman exclusive

Let me review some financial facts that I know are not new to you-but bear repeating-about how much it costs to send your little ones to college. The current average annual cost at a four-year private school runs nearly $27,000 according to the College Board, while public schools clock in at a stiff $10,600. And that's per year, folks. Multiply that by four years, and two or three kids, and you are looking at some astronomical sums. And I can guarantee you that those costs are going to keep climbing. Private school costs have been rising about 5 percent a year lately, and public school costs have risen about 8 percent a year, as cash-strapped states are forcing students (and their parents) to carry more of the load.

That shouldn't make you panic, but it should make you pragmatic. There is absolutely no shame in acknowledging that you can't finance all of your child's college education. As a matter of fact, rather than feeling bad about it, I think you should look at the situation as a terrific opportunity. This is a chance to do some truly first-rate parenting, as opposed to simply following some misplaced sense of parental "duty." In my opinion, savvy parents understand that involving their kids in the responsibility of funding their own college is a great way to give them an invaluable financial education.

Be a Financial Teacher not a Preacher
It amazes me how often parents today completely miss the boat on their role as financial teachers to their kids. Everyone is so focused on imparting the moral and ethical rules of the road they overlook that their children also need to learn the financial lessons of life. Just like everything else, kids learn about money from their parents. And they learn about it not from your words, but from your actions. Your financial example is being soaked up by your kids whether you know it or not. Every move you make today is going to impact how they handle their finances as adults.

When they see you being irresponsible with your finances, they will likely end up being irresponsible with theirs as well. And it is absolutely irresponsible to focus on their college funds if it means shortchanging your retirement fund.

Moreover, the great irony of your misguided heroic effort to pay for college is that if you end up financially strapped in your "golden" years, you are going to be a burden on your kids. And I'm not just talking about money. Your children are also going to pay an emotional price when they come to realize the reason you can't afford to keep your home or retire is because of the financial sacrifices you made for them to get a college degree.

I can't tell you how many young adults whose parents made this dangerous trade-off tell me they wish their parents had taken care of their retirement instead. The kids tell me that if they had understood the family's financial situation they wouldn't have asked, or presumed, that their parents pick up the bill for college. They don't understand why their parents put their own future at risk, when all mom and dad needed to do was be straight with them, so the family could work together to finance school through loans, grants, and aid. There is considerable frustration and confusion about how their parents' love could have so clouded their decision-making; many of these kids are deeply disappointed in their parents for forgetting that when it comes to showing love, grand gestures are a foolish substitute for honesty and trust. Clearly, the higher expression of love would have been to do what was best for the future of the entire family.