Setting Our Kids Up for Success: Monica Felton on Future-Proofing Families

🎓 College Planning & Family Financial Leadership with Monica Felton

💸 Are you overwhelmed by the rising costs of college and unsure when—or how—to start planning for your child's educational future? 

💼 In this insightful episode of Pathways with Amber Stitt, host Amber sits down with financial planner and family advocate, Monica Felton, to break down the realities of college planning, family financial leadership, and the conversations every household should be having.

🏦 Monica shares her expertise from 15 years of helping families save and pay for college without sacrificing their retirement.  

👂 You'll hear a candid discussion about:

💰 The best time to start planning for college expenses (hint: it's sooner than you think!).

💳 Busting myths: why scholarships and financial aid may not cover as much as you expect.

📜 How recent changes to FAFSA are impacting families.

🧑‍🎓 Strategies to set realistic expectations and involve kids in their own success.

🏡 The importance of open, honest money conversations at home—and why leadership starts there.

👩‍❤️‍👩 Whether you’re a parent of toddlers or teens, this episode will help you feel more empowered and less anxious about your financial path ahead.

📽️ To watch this podcast: https://youtu.be/h798nKnvqss

🔗  Resources & Connecting with Monica Felton:

📲 Website: MonicaFelton.com

📲 YouTube: @MonicaFeltonCFP

📲 Facebook: @monicafeltoncfp

📖 Buy Monica's Book, "Making College More Affordable"

#collegefinancialplanning #familyfinance #pathwayswithamberstitt #FAFSA #monicafelton #amberstitt #financialfreedom #educationplanning #collegefinancialaid #collegefinance

📻 Thank you for tuning in to Pathways!

🔗 Connect with Amber on Social Media:

• AMBER’S INSTAGRAM
• AMBER’S LINKEDIN
• AMBER’S FACEBOOK

📲 Be sure to visit Amber's website:

www.AmberStitt.com

And remember, let's take action today!!!

Transcript

Monica Felton [00:00:00]:
My tagline, or what I always tell families is, "The best time to start planning for college was in the womb. And the next best time is today." And I do think that's what happened. We have these beautiful little creatures that God puts in our hands, and then we work so hard to raise them that we're not necessarily thinking about that future cost of college when they're 18 years-old and they go on. And I just think it happens that life happens. And so people are not planning for this expense.

Amber Stitt [00:00:29]:
Hello and welcome to Pathways. I am your host, Amber Stitt, your host for this leadership series episode. And today we welcome Monica Felton to the show today. Welcome, Monica.

Monica Felton [00:00:42]:
Thank you.

Amber Stitt [00:00:43]:
So excited to be able to record with you today. And you have been somebody that's been on my mind through my community. You're pretty famous, actually, if you didn't know. You're quite the figure and a perfect guest for the leadership series. And it's because of the true advocacy that you've done throughout the last 15 years, working with families, working with them on strategies for what I call financial freedom, but really the flexibility to plan for college and to build some competency. So let's share with the audience a little bit about you and how did you get here?

Monica Felton [00:01:18]:
Thank you so much for hosting me. So for 15 years, I've been helping families save and pay for college so they don't sacrifice their retirement. And I was in the corporate world for almost 20 years prior to changing career paths into the financial services industry. And the reason I did that is because money is just dirty paper, but it's what money will do for you. And unfortunately, most people don't understand what they want the money to do for them. So the clearer I can get with clients about what their goals and aspirations are and what they want their future to look like, the better I can coach them on money. And so that's what led me from medical devices into financial services. And I've just been so grateful over the last 15 years to be able to do this and honestly, just never looked back.

Amber Stitt [00:02:14]:
I always like to talk with people that have found their own way, their own path to leadership. And when you do this and your family sees you thriving, pivoting, changing the narrative. That's showing leadership to your legacy, as well. And I know you're a mother of two, correct?

Monica Felton [00:02:30]:
Correct. Yes.

Amber Stitt [00:02:31]:
Was there a point in your life as a mother, spouse, partnership, whatever it is, was for you, where you go, "I have to really dial into the competency behind college and how to get kids into college." Was that part of the process?

Monica Felton [00:02:47]:
Well, I love what you're saying because, yes, my kids were the impetus to change because when I was in corporate America, I was tied to a pager and I was on call and I really was not able to be there, not only physically, but mentally for my children. And so the change in career path was so I could be more available. I think as women, one of our highest callings are our children. And so I wanted to be a provider as well as a leader to my girls. So that's really why I pivoted. Working 24/7 on a pager didn't allow me that opportunity. So I had quite a bit of freedom, as we talk about, to be the person that I ultimately wanted to be, not only for myself, but my family.

Amber Stitt [00:03:34]:
When we talk about freedom and I mentioned flexibility, we've talked about, or I've seen you talk about peace of mind. And there's a common narrative with your clients, when you meet them or you've asked them, there's a similar statement that comes to mind. So if you're giving yourself freedom mentally and you have peace of mind, I mean, it's a wonderful feeling you have that now, or have had it. Can you share with the audience what is that typical thing when you meet new clients where there's that one thing that keeps them up at night.

Monica Felton [00:04:03]:
So I am a holistic planner in that I'll look at people's overall finances, everything they're doing, what their goals are. But I really got very focused these 15 years ago because I would ask families, I would say, "What's that one thing that keeps you up at night financially?" And without question, they would say, "How I'm going to afford to pay for college." Now, remember, this is 15 years ago, and the cost of college has tripled since then. So it continues to be a very difficult, anxious ridden, worrisome subject for families about what benefits they're going to provide their children so that they can be successful in their future.

Amber Stitt [00:04:46]:
You talk about being an educator on how money works. You help people with mindset really to dive deep into understanding money. And when do you think people should start even considering planning for college?

Monica Felton [00:04:58]:
Oh, my goodness. So my tagline, or what I always tell families is, "The best time to start planning for college was in the womb, and the next best time is today." And I do think that's what happened. We have these beautiful little creatures that God puts in our hands, and then we work so hard to raise them that we're not necessarily thinking about that future cost of college when they're 18 years-old and they go on. And I just think it happens, that life happens. And so people are not planning for this expense. And I know this for certain because in the 15 years I've been doing college financial planning, I've reached out to the primary schools, the middle schools, the junior highs, and the high schools. And really it falls on deaf ears outside of high school.

Monica Felton [00:05:46]:
So the soonest, or the most consistent time I get parents to think about college is really the ninth grade of high school. And not that that's too late, but imagine if you were actually planning when you had a one year-old, or at least you were considering putting together a source of funds that were specific to your child and the success of their future. Because the success of a child's future is not always wrapped in college. A lot of times it could be a trade. We need beauticians, electricians, plumbers, technical people where college is not required. So it's okay to build a pool of capital for your child's success and earmarking it for whatever that future success is, because I know, I have two girls and they couldn't be more different people. So we don't know who they're going to evolve into, or what they're ultimately going to become.

Monica Felton [00:06:39]:
But as parents our job, in my humble opinion, is to give them the tools and resources to be successful in the life that they ultimately want to create. And unfortunately, I think college has been rammed down the throats, certainly of middle-class Americans. And it's just, again, for many, college can be a benefit. But I don't even think we're having the conversations to discuss what it is that we really want out of our children, or what do our children want out of their lives to determine if college is even necessary.

Amber Stitt [00:07:11]:
Why does it fall in deaf ears at about senior level? You said something about the parents.

Monica Felton [00:07:16]:
Oh, I think the plan for college falls on deaf ears, really, prior to the ninth grade.

Amber Stitt [00:07:23]:
Okay.

Monica Felton [00:07:23]:
Yeah, just because parents are, you know, they're trying to raise a little person and I will tell you, college is shockingly expensive. And I know this because I talk to at least 3 families a day. I don't think people really appreciate how expensive it is. They just don't believe it. They think they're being lied to. But I'm here to tell you, ASU today is $32,500 a year, and it takes 4 years to get a diploma. That's a whole lot of money.

Monica Felton [00:07:55]:
Now, are there options and resources? Yes. And if you have a bright kid, there is some financial aid available. But these are conversations we should be having much earlier in the game. But like I said, at least 9th grade, you should be having these types of conversations with your children.

Amber Stitt [00:08:14]:
You give people some space to learn and add on layers over time, when it comes to their education, I assume if they're starting when the baby's in the womb, as you joke. But seriously, what if there's more than one? The sooner you hit start, build your competence level because it takes a little bit of time. You don't have to have a finance background to understand money. And I know you're very much a passionate person about that and advocate for everyone in the family, in the household...

Monica Felton [00:08:39]:
Yes.

Amber Stitt [00:08:40]:
Needs to be on the team.

Monica Felton [00:08:41]:
Right.

Amber Stitt [00:08:41]:
And work together and maybe have different roles in it. But be a part of the conversation. Let's start as early as possible. When you meet people, is there almost a fire drill every year that you have about a time of year where people are rushing to scurry to figure out what to do?

Monica Felton [00:08:55]:
Well, certainly when your student is a junior or senior in high school, there's a lot of scurrying. But the commitment that the college planners here in the state of Arizona and myself in the local high schools, because I speak all over the state of Arizona to the local high schools, is really to get families to have discussions. I think what's important for families to know is there is no right or wrong. Our kids are all uniquely different and embrace that. But start having conversations with them in the 9th grade, or earlier, about what do you want to do when you grow up? What does that look like? Have them go to work with mom or dad and let them get an idea about what they want to do. And yes, money is important. And I have families that earn 7 figures and money is still a topic of conversation when they're choosing their college of choice. Because there are real Ivy League, those very tippy top prestigious schools, those schools are upwards of $90,000 a year times 4.

Monica Felton [00:10:02]:
That's a big number. And then you multiply that times 2 or 3 or 4 children. So money matters. And having these conversations I think is vitally important for the success both emotionally of your child, financially to the parents, and so my job as a financial coach and advocate to helping families pay for college so they don't sacrifice their retirement is number one, foundationally. What's the goal here? What is it that you're trying to accomplish? Number two, what will college really cost you. There are equations that the government uses to determine how much money you're going to have to pay for college. So what is that? And you'll know that very early.

Monica Felton [00:10:48]:
It's based on your adjusted gross income and you have to pay a percentage of what you earn. So is that feasible, especially if you have 1, 2, 3, 4 children? Will you, as a family, be able to afford that? A lot of people avoid finding out truth. Let's just get a baseline, right?

Amber Stitt [00:11:10]:
Let's be real. We're talking to everybody listening wherever you are. All of us need to reflect. Are we really accountable?

Monica Felton [00:11:17]:
Yeah. Right. And again, it's just information, right? So the more information we have, the better decisions we can make for our future and our children's future. But it is amazing to me how few families that I meet, and I meet hundreds of them a year, have actually had these discussions with their students.

Amber Stitt [00:11:36]:
Well, I think too, when we have these amazing kids that might earn a scholarship, that doesn't necessarily mean college is covered.

Monica Felton [00:11:44]:
Oh my goodness, no. So part of my workshop is helping families understand the true cost of college. That term is called cost of attendance. So like I said, at Arizona State University, it's $32,500 a year. Now that's all in, right? That's books, room, board, and tuition. That's the whole kit and caboodle. Out of state schools are upwards of $60,000 and those elite prestigious, are upwards of $90,000 a year. So families at that point are like, "Wow, well then I better get financial aid."

Monica Felton [00:12:19]:
Well, financial aid is a big word and I think it's predominantly disappointing.

Amber Stitt [00:12:24]:
Yeah.

Monica Felton [00:12:25]:
Because when you get a scholarship, first off, you must be a scholar to obtain that, which means your student has to be better than a 3.5 GPA. So that's all A's and a few B's. And most teenagers today, we do have some extraordinary ones, but you know, they've gotten a C or 2, or a D or 2. So to really get that merit aid, which is based on your students academics, you have to truly be an academic. So then families will say, maybe I won't get any academic money, but I'm definitely going to get need based financial aid. Well, again, you can do the math pretty quick. The government expects you to pay 25% of your gross income.

Monica Felton [00:13:08]:
Okay, so those are the numbers. We can all do math. So financial aid exists, but a full-ride scholarship at ASU is a $10,000 presidential scholarship for academics, which means I still have to come out of pocket $22,500.

Amber Stitt [00:13:26]:
Well, since we're getting technical, let's do a little case study. You talked about a person that you helped. They're making a certain salary and there was a certain tuition that came along with it. Can you break that down? I think it's a perfect illustration to what you're talking about.

Monica Felton [00:13:38]:
So FAFSA, the Free Application for Federal Student Aid, there's a term on there, it's called Student Aid Index. And basically what that is is it's the amount of money that the feds have determined that you could pay per child for school. And so that equation is based on income and assets, in essence. So if you're making $100,000 a year, you're going to take 20% of that. So that's $20,000. And then if you have any visible assets, and basically that's everything outside of money already in your qualified plans, like a 401k cash value, life insurance and annuities, those assets are excluded from the equation. So is equity in your home, that's excluded. But if I have visible assets, like a brokerage account and a savings of, let's say, say $50,000 of visible assets, they're going to assess that number at about $3,000.

Monica Felton [00:14:39]:
So I make $100,000 a year and $50,000 of visible assets, they're going to say I can afford $23,000 a year to pay for college for one student.

Amber Stitt [00:14:51]:
1.

Monica Felton [00:14:51]:
Now, the FAFSA Simplification Act of 2021 basically made some radical changes to the FAFSA. We've had more changes to the FAFSA this past year because of this Simplification Act than we've ever seen before.

Amber Stitt [00:15:06]:
So it's helping, or no?

Monica Felton [00:15:07]:
Well, it depends on what side of the equation you are. Middle class families, in my opinion, are being hurt because as we talked about having multiple students in college at the same time, there used to be a student discount, or a sibling discount. So if you had multiple students in college at the same time you are getting a huge benefit. Now they've eliminated that.

Amber Stitt [00:15:30]:
I see.

Monica Felton [00:15:31]:
So the same family that I just told you about who may makes $100,000 a year and has $50,000 in visible assets, they're expected to pay around $23,000 a year. If they have two kids in college, they'll be expected to pay double. So these are the types of changes that are hurting middle and upper class Americans. Now, there have been some enhancements to availability of Pell Grants. But a Pell Grant is $7,100 a year, and that's what you're eligible for. It doesn't mean you'll receive all of that.

Amber Stitt [00:16:05]:
I see.

Monica Felton [00:16:06]:
So, yeah, there's a lot of changes that are happening right now with higher education and the cost of, and who's going to pay for it. But at the end of the day, I want families to understand you as a family are expected to pay for college. In some instances, you can get help, but that's really a benefit that you are required to pay for for your family.

Amber Stitt [00:16:31]:
So let's talk about leadership in the home. You've worked with thousands of families over the years. Is there one thing, or maybe even something you're seeing that's a constant after speaking in schools? What can people start doing now to apply some leadership in the home, in the conversations, or setting expectations for their children, too?

Monica Felton [00:16:50]:
Well, I think, again, I mentioned it earlier, awareness is key, really. Understanding what the goals are as a family, as parents, as students, and talk openly about that. You know, this is where leadership begins. Having hard, difficult conversations. That's what leadership is, you know.

Amber Stitt [00:17:08]:
Yes.

Monica Felton [00:17:08]:
It's not just all the cherries on top. Leadership is really having difficult conversations.

Amber Stitt [00:17:14]:
And the kids are watching if the parents are not organized in this manner. They are not always going to see it right at the beginning, but gosh, as they get to a certain age they're going to say, "My parents didn't have it together."

Monica Felton [00:17:25]:
Right.

Amber Stitt [00:17:25]:
And I don't want that in my home.

Monica Felton [00:17:28]:
Right.

Amber Stitt [00:17:28]:
There is a little bit of distrust that can come from that where you're going, "I looked up to my family, but why didn't they take it more serious?" And so we can try, like you said, today.

Monica Felton [00:17:37]:
Yes.

Amber Stitt [00:17:37]:
Today is the time to start being serious about it.

Monica Felton [00:17:41]:
Agreed. One of the tenants, or the largest goals that I have, along with the college counselors at the high schools that I work with here in the State of Arizona, is to never have a high school senior sitting in the counselor's office crying again because they were able to get into the tippy-top school and their parents can't pay for it. Imagine that, you're a student, you worked your tail off, you've done everything right. Mom and dad are driving BMWs. They're providing cars and housing and all this. And all of a sudden you get into...

Monica Felton [00:18:19]:
I make this up, I use Stanford all the time because it's a West coast school. You get into Stanford, it's $87,000 a year. And your parents say, I can't afford that.

Amber Stitt [00:18:27]:
Right.

Monica Felton [00:18:27]:
It's devastating. It's not only devastating to the student, which that's of course a given, but devastating to the parents. Imagine how much you've now let them down, and in my opinion, it could have been avoided. Why are we not having these conversations with our kids? This is life. Life is hard. Life is a financial decision. We have to make choices about everything we do. Finances are no different.

Monica Felton [00:18:52]:
And so my job and I tap my drum as often as anyone will allow me to, is know what are you expected to pay for college. And then let's start building a plan around that. Really, what you can afford to pay.

Amber Stitt [00:19:09]:
Sounds like you can reverse engineer it once you know.

Monica Felton [00:19:12]:
Yes.

Amber Stitt [00:19:13]:
And you've talked about on your different videos you have on YouTube that the...was it at least 5%, maybe 6%, year-over-year of growth in education costs. So we know that's not changing.

Monica Felton [00:19:24]:
Oh, no.

Amber Stitt [00:19:24]:
So there's an expectation. We know it's happening. So beat the drum. Because if you know that your family size and what you might want for them, you can backfill and reverse engineer with your help.

Monica Felton [00:19:34]:
Oh, absolutely. And I think getting your children involved in these discussions is very important because then they too...

Amber Stitt [00:19:42]:
Yeah.

Monica Felton [00:19:43]:
Because as I mentioned, if your student is a scholar, they can earn and at least in state schools, a $10 to $12,000 scholarship. That's a lot. That's a huge contribution that they're making to advocate for their future. Kids should be responsible for advocating for their future. If you're a C student and not really excelling in high school, maybe college is not the right step for you. Maybe you need a gap year.

Monica Felton [00:20:10]:
Maybe you need to go to work. Because again, we are at a position where the cost of college is so expensive that it really is forcing families to make some big decisions. And I have seen very poor decisions being made. And I just feel with awareness and discussion and open conversations, a lot of that really could be avoided.

Amber Stitt [00:20:34]:
Awesome. Well, thank you so much for what you do. How can people find you?

Monica Felton [00:20:38]:
Well, I have lots of information, educational videos on my website, which is www.MonicaFelton.com I also have a YouTube channel, which is @MonicaFeltonCFP. I have a Facebook channel, of course, @monicafeltoncfp. And then of course, you can always reach out to me. I love hearing from families. I love advocating for families. This is important. And I know, I have two daughters, 21 and 20, and they're our hearts and we want to provide them every opportunity possible. So if I can engage and help you in that process it would be a privilege.

Amber Stitt [00:21:12]:
Awesome. Thank you so much for being here today.

Monica Felton [00:21:14]:
Thanks for having me.

Amber Stitt [00:21:16]:
Thank you for joining us on this episode of Pathways. For more information about the podcast, books, articles, the blog, and so much more, please visit my website at: AmberStitt.com And remember, let's take action today! Thank you for listening!