College Students all over the country are preparing to head to campus for their first semester. For many new college students, this will be the first time that they will be able to spread their wings, as well as their first shot at financial freedom.
Children of any age rely on their parents for guidance and words of wisdom, how many of you remember them saying, “Don’t Put Pennies in Your Mouth!” It is important that as your student enters into this new chapter of their life that provide them with the tools to succeed. Below we have listed a few topics we think will be helpful.
Help Your Student With a Budget
Sit down and come up with a reasonable budget with your child. Prepare a budget that allows for fixed items, extra curricular items, as well as larger unexpected items. Determine the easiest way for them to keep track of their budget, If you kid is a whiz at math you a spreadsheet, if they are more technical find an app that will better suit them.
Borrow as Little as Possible
Student loans should be utilized for tuition, books and necessary living expenses. It can be tempting to borrow more and use the money on a spring break trip or shopping at the mall, so it is important to remind that that student loans do not go away, and that trip may end up costing you thousands. Depending on how educated your child is with financial situations you may want to suggest that let you read over any loan paperwork before they sign it. The average college student in 2016 graduated owing $37,173.
Take Education Seriously
College is a new and exciting time for many young adults; it is often the first time they are away from home and able to find their wings. However, having too much fun and slacking at school can be detrimental to your education. Failing a class not only puts them farther from graduation, not only do you have to make up the class, but you will have to pay for it again.
Use Credit Wisely
The Credit Card Accountability, Responsibility, and Disclosure Act has limited the marketing on a college campus and preventing the issuers from extending credit to someone under the age of 21 unless they have proven income or an adult co-signer. If co-signing isn’t something you want to do, a parent may add their child to their card as an authorized user. Adding your child as an authorized user will allow them to begin establishing their credit and they can use in case of an emergency. Keep in mind that their sense of urgency may be a little different than yours, so determining the guidelines is essential.
Text books are a major expense for college students, and over the course of the entire college career you could end up paying thousands of dollars on books. Ways to save on books may be buying used books, or renting or borrowing from a friend that may have taken the class the semester before you. There are several online companies where you can rent the books for a semester at a much lower price.
Basic Living Skills
Making sure that your child has a good understanding of basic living skills is important in saving money. Teaching your child how to cook or make a lunch instead of eating out daily, can save them thousands of dollars. Making sure they know how to do their own laundry can save you money by not having ruined clothes.
All parents want the best for their children and hope to provide them with the tools to become successful adults. The most important thing we can do is teach them by example, children learn by what they see.