One of the biggest challenges facing college kids is managing their own money. For many young people, this is their first time acting without the complete oversight of their parents. That could lead to problems, but it doesn’t have to. Here are a few suggestions to help make sure your kids are ready to be financially independent.
Start Early. Ideally, you would have been talking to your kids about money and its basic concepts long before they headed off to college. However, if you didn’t, start now. Talk to them about establishing the most basic banking relationships, like a checking account (with a debit card), a linked saving accounts and — when they’re ready — a credit card. And make sure they know about ATM fees and overdraft charges — two easily avoided money-suckers.
Set a Budget. Help your kid set up a budget using an online source like PocketGuard. That way, once your kid is off at college and figuring out what their spending will look like, the budget will be easily accessible for both of you. Discuss what items they’ll need to pay for and be sure to highlight saving. Even if it’s just a tiny bit each month, getting kids in the habit of stashing away cash will serve them well in the future.
Consider a Job. There are pros and cons to working while in school. While having a job means more income, it also could delay graduation. As US News reports, students who work full time are 50 percent less likely to graduate in six years or less than students who work 12 hours or less per week. If your kid is planning to work, have them find employment near school so they waste less time commuting.
Remind Them of The Big Picture. Make sure that your child knows that doing well in school translates to doing well after school. This might seem obvious, but it’s worth pointing out. The longer they remain in school, the more tuition costs pile up, the longer they’ll be paying off loans. It’s all connected. If they are smart with their education spending and money now, there’s a good chance they’ll continue that trend for years to come.