How to help your child head off student loan debt

  • In all, more than 44 million Americans hold close to $1.5 trillion in student loan debt.
  • Financial literacy at an early age helps your child comprehend saving and spending.
  • Have a preschooler? Start with "needs and wants."

If you want to have a financially savvy college student, start talking to your child about money while she's still in diapers.

It's never too early to begin talking to your kids about financial literacy, said certified financial planner Marguerita M. Cheng, CEO and co-founder of Blue Ocean Global Wealth in Gaithersburg, Maryland.

"The key here is to make sure that the conversation is relevant and age-appropriate," she said. "For example, if you have a toddler or a preschooler and it's difficult to reason with him or her, the last thing you want to say is, 'No, we don't have money for that.'"

Rather, discuss the difference between needs and wants, Cheng said. Your child might be able to appreciate that while clothes, food and housing are essential, toys are not a necessary expense.

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Having that talk while your child is still young helps pave the way for a more serious topic: paying for college.

Outstanding student loan debt in the United States is rapidly approaching $1.5 trillion.

College graduates are learning a brutal lesson as compounding interest, even on loans that are in forbearance, leaves them owing far more than they originally borrowed.

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Borrowing in itself isn't necessarily a problem. Rather, students need to learn how to borrow prudently, taking out only what they can repay after graduation.

"It's a great opportunity to sit down with your student and discuss the cost of attendance and how much they'll be paying for that degree over the course of a lifetime," Cheng said.

"It's really important to have that candid conversation about how much they will be paying over the course of 10 to 20 years for that degree," she said.