If your child is preparing to head off to college in the fall, there are some important financial considerations. Teenagers have little idea about how to save money unless they have been brought up with a strong background in money management. Most will spend frivolously whatever money they have earned from their jobs. It is important to teach them budgeting skills and instill the desire to save.
Financial Tips for College
- Create a budget. Go over finances together. There are many avenues of revenue students will have available. Money from a job, financial aid, and perhaps extra funds you’ll provide. Use this time to start the conversation about smart money choices. Once your student moves to school, it may no longer make sense for him or her to get that favorite milkshake once a week or buy that new pair of sneakers. Allow your child to take the lead. He or she will stumble and make mistakes. Check up and let your student know you are there to help.
- Try to minimize the amount of student debt your child incurs. Student loans may look like extra cash to students if it is placed in the right bank account. Impress upon your child the importance of where and on what that money should be spent. If there are extra earnings made during this time, encourage your child to apply those funds toward student loans.
- Keep an eye out for student discounts. These can be found at restaurants near the school. Local venues may offer discounts on tickets to events. These discounts can help teach your student how to save a few dollars. Encourage your child to save extra money on textbooks by buying used, which are offered at most college bookstores.
- Use online services. It may be difficult to get your student to write out his or her budget or best places to save money. Plenty of online services offer free budget keeping.
- Cut non-essential costs. Encourage your student to utilize public transportation, to walk, or to ride a bike to and from class. Doing so will reduce the need for a car at school, reducing money spent on gas and maintenance.
- Pay attention to meal plans. Discuss dietary needs with your student and how much is being spent on food.
- Set limits. The first year away at college will be difficult for your child. Let him or her know that you are there to help, but give your student the freedom to make mistakes and learn from them. Clearly spell out your financial limits and encourage your child to set personal limits. Learning to set aside a certain amount of money each month will help your student learn fiscal responsibility.
- Protect your identity. Impress upon your child the dangers of identity theft. College students are easy targets and are at the highest risk. Explain the risks involved with sharing personal information and advise your child to use caution. Instruct your child to check his or her bank accounts routinely and report any suspicious transactions.
Exploring the first year of college financially can be fun but stressful. Encourage your student’s success and be available when there are failures. Your time and patience will pay off with a financially stable young adult.