Parents’ Guide: Financially Preparing Your College Student
Hi Money Masters,
Summer is over and the kids are back to school. For those who have children in college or getting ready to go to college, have you thought about how they will handle finances on their own? Some of you may give your child money for the year or some to help out and some students will have to work while in school. In any case, they still need to know HOW to handle money properly and wisely. That is where you come in!
Here are some steps you can take to help your child make smart financial decisions:
Step #1: Start Early
It isn’t a bad idea to teach your kids money at an early age. High school students should have at least a basic understanding of how to manage a sum of money that is in an account or connected to a debit card. But, when they go to college they will need to know how to BUDGET that sum as well. There will be many more expenses to manage!
Step #2: Be an Advocate
If you choose to give money to your college student you should give it in increments, not one time all up front. Even the most financially responsible young adult could be tempted by having a large amount of money at his or her disposal along with the increased freedom of going to college. Help them learn by giving the money in smaller amounts, say monthly. That way you can show them how to set up a month-to-month budget.
Step #3: Let Them Make Mistakes
Part of being an advocate for your child is also allowing them to take risks and make mistakes. Once you have shown them how to fly, let them spread their wings and leap. If they spend more than they should on pizza for the month, they will learn that peanut butter and jelly is on the menu for the next month. 🙂 Dealing with these less hazardous financial consequences now is better than harsher consequences later in adulthood.
Step #4: Research Together
As a parent, you always make sure your child has what he or she needs: food, clothes, a loving environment, safe lodging, etc. This also goes for making sure your college student has the financial management resources he/she needs as well. Search the internet together and find the best apps and websites for your financial situation. Arm them with the 21st century tools they need for success.
It may be hard to watch your children leave the nest. But if you have prepared them for the financial challenges of the future you can rest knowing that you’ve done your job. Know that your child is ready to go from piggy bank to, possibly, Wall Street!
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