It’s that time of year again where new and returning students arrive to college campuses for the fall semester. Parents sending their kids off the college may have the traditional exchanges of “I love you”, “be careful” and “don’t forget to call.” But there may not be one about finances. It may be worth lecturing your kid on potential consequences of poor money management. Here are three conversations you should have in their first semester.
1. Learn to Bargain Hunt
No matter how they are used to living at home, everyone should get used to living like a student. Even if parents are helping their kids pay for expenses they have while in school, that student will have to learn to be financial independent eventually. College is a good time to start teaching that lesson if you haven’t already.
There are plenty of resources available on campus but there are probably more affordable options elsewhere. Help your student learn how to search for the best prices books. You could get them from a used book store, online rentals, or even the library. Many campuses have convenient book stores on campus but just by looking outside of it could save you a significant amount. It is also important to teach your kids that student loan refund, campus credit or funds from parents are not funny money. If they do not learn these lessons, they face spending problems then they graduate and are completely on their own.
2. Your Credit Report Is as Important as Your Report Card
It is important to learn a lot in school but having student loans or credit cards in college should have you also paying attention to your credit report. If your young adult gets a credit card, it could be tempting for them to spend more than they can afford at the time. Explain to them how credit card debt will affect their credit history and how long they will pay for those charges if not paid in full. If you teach them how to manage their finances and debt, they may thank you at graduation when they do not have as much to repay.
3. You’ll Pay for Skipping Class
Learn how much a course is and how often they meet to calculate how much every class costs. Figuring out this price could be a good example of how much money is being thrown away for every class your student skips. Whether or not they are learning anything, they will have to repay the loans. Ideally, if they make the most out of their college days, he or she could get a good job and repay student loans without an issue. Considering that student loans are rarely discharged in bankruptcy, you and your child should want to do everything possible to keep up with the payments.
Teaching them these few lessons can lead to a positive impact on their financial future. Handling money, student loans, and credit cards can come with more responsibilities than they student may consider initially. Talk to a Wealth Advisor at Prosperity Wealth Advisors for more information on college funding. You can reach us at 813-321-1572 or by email at firstname.lastname@example.org.
Source: DiGangi, Christine. "3 Money Lessons for Your Kids Before They Go to College." Yahoo Finance. N.p., 26 Aug. 2014. Web.