If your child is one of the millions of college freshmen headed off to school, your August might be packed with shopping, gathering textbooks, and packing up entire rooms. And while picking out the perfect dorm decor might seem important, don’t neglect the deeper subjects.
Now is the time to talk to your child about personal finance. As a parent,
you have the opportunity and obligation to prep your freshman on budgeting and smart spending strategies before he or she hits campus.
While college students might roll their eyes at the idea of making a budget, knowing how to manage money is vital to the college experience. Whether your child is paying his or her own way, receiving your help, using financial aid, or a little of all three, college is an expensive experience that becomes pricier with poor spending practices. By passing on a few words of wisdom, you can give your freshman the tools he or she needs to start college on the right financial foot.
Personal Finance Tips for College
1. Create a Budget
Carefree high school students frequently spend whatever is in their bank account, living off their parents’ generosity or the spoils of a part-time job. Once that student moves away to college, a budget becomes crucial.
Whether or not your child has been exposed to a budget, it’s important that you sit down together to look at finances. Map out his or her various streams of income, including money you’ll provide, income from a job, and money coming from student loans, grants, and other types of financial aid. Then, show your college freshman how to categorize expenses so he or she knows where it’s all going. While you can’t forceyour student to stick to a budget, you can feel confident he or she knows how to use one and has a clear picture of what is and isn’t affordable.
As stated, the trick with any budget is sticking to it. Once you and your child have gone over the budget, take some time to talk about how to make smart money choices that fall within the budget. For instance, help him or her navigate free or low-cost social activities, such as outdoor concerts, city-sponsored events, or school-sponsored adventure trips. You know your child better than anyone, so if he or she loves spending money on cappuccinos or the latest designer clothes, take some time to talk about buying clothes from discount retailers or brewing joe at home.
While it’s tempting take over your child’s finances, let him or her lead – after all, it’s time for your college student to manage a budget. You can check in to make sure that he or she is on track, but let your freshman remain in charge.
2. Use Online Services
College students aren’t likely to sit down and go over finances in an Excel spreadsheet – especially when there are better options available. Instead, set your student up with an online service or smartphone app that makes money management easy and convenient. After all, that smartphone is practically glued to his or her hand anyway.
Some apps, such as Mint, make money management easier for a busy or forgetful college student. Mint enables users to upload bank account and expense information so he or she can manage all of his or her accounts in one place. The app makes budgeting a little more accessible for a college coed who is busy and on-the-go. This ensures fewer missed payments and penalties, as well as easy access to account balances.
In addition to money management apps, make sure you also take the time to set your student up with online banking services so he or she can transfer money online or use mobile deposit.