A Suze Orman exclusive

I hope you've become open to the possibility that financially coddling your kids when you can't afford to is not a way to show love.

Now let's tackle how to come up with a responsible college plan.

Rule one is to respect your kids. That means letting them understand your situation as soon as possible. Do not wait until they are juniors in high school to tell them you won't be able to pay for college. That is absolutely disrespectful to your kid. What are they supposed to do at that point, other than panic?

I want you to sit them down no later than eighth grade and talk to them about the financial realities of college, and how that fits in with the family's financial realities. Do not apologize for your situation. Do not feel bad about it, and most importantly, do not talk about it as if you have somehow "failed" them. Explain to your kids that given the astronomical cost of school, you are going to need them to help their own cause. Notice the spin there. I didn't say to tell your kid "Hey, we're really sorry but we can't afford all of your college costs." That casts this as a negative. Don't come at it that way. It sends a bad message and will probably cause your kid to worry about their future.

The conversation - and game plan - should be given a completely positive spin. This is an achievable family goal. And they get to play an important role in making sure the plan goes well. Discuss what they can do to help out. They can get great grades, which will boost their odds of landing a scholarship or aid; they can focus on extracurricular activities that will help round out their academic record; and they can start thinking about how they can save money. Maybe they can ask grandma and grandpa to invest in a college fund for them for their birthday gifts, rather than asking for the latest and greatest gizmo or fashion must-have. And when they hit 15 or so, they can get a part-time job.

You might want to consider giving your kid a very specific goal. For example, the current annual cost for college books can be more than $700 at a private school. So by the time today's 12- or 13-year-old heads off to college those costs are probably going to top out at more than $1,000 a year. Telling your kid you want them to save now so they can cover the book costs - and maybe the pizza and phone bill costs, too - gives them a tangible goal to aim for. You can use the simple calculator at Calculators.net to show your kids how stashing away money each month and earning a reasonable rate of return will help them reach their goals. For example, saving $50 a month for six years (a decent baby-sitting gig should make that doable when they are younger) and earning 4 percent on that investment (about what you could get in a high quality bond fund) will net you more than $4,000.

And - together as a family - you can learn the ins and outs of financial aid, so you have realistic expectations and understand the best moves to make now to maximize your aid chances. A good starting place is FinAid.com. Then head over to Savingforcollege.com to learn about the various tax-advantaged plans you can use to save for college. (But remember, I only want you saving for college if you are already doing a great job saving for your own future.)

By being realistic and upfront you will be able to graduate into retirement without being a burden to your kids. And in the process you will have taught your children how to be financially responsible. In the end, that may turn out to be as valuable to them as college itself.