Have you had the money talk?
Sending your student off to school is an exciting, but stressful time. They’ll be making new friends and learning how to navigate in a space where you won’t be readily accessible. While these are just some of the things they will experience, finances are a very important element throughout the college years. Having the “money talk” can give them a solid foundation while empowering them to think like an adult.
Budget
Do they know how to create a budget and stick to it?
There are only a few weeks left until your student goes away. It’s time to list all the income and expenses on a sheet of paper where they will be able to see everything clearly. Have the discussion on what expenses you will and won’t cover, and what they are responsible for. Teach them how to list due dates for those bills and have ongoing conversations on how they are doing with their budget.
Credit
The conversation about credit is a serious one. Helping them understand what credit is and how to establish and maintain a healthy credit rating is key. Try and steer them away from getting credit cards until they are upperclassmen or out of college. It’s best to avoid them because students can quickly become tempted to purchase things they don’t need. Here are a few additional things they need to know about credit:
- Credit can help or hurt a job search
- Dings on their credit can last up to seven years
- There are smart ways to build credit
- Having good credit can help save money in the long run
- Paying student loans before they are due only helps eliminate debt
Student Debt
Have a serious discussion with your student about student loans. There are a number of instances where students view those loans as an attractive option to do something else with the money besides using it for education. Knowing the dangers of student debt is crucial. Instead, they should be looking and applying for scholarships all throughout school. If they feel as if they need extra money, finding a job through work study or part-time somewhere will work.
Finance Scams
Finance scams are becoming a reoccurring thing. Teaching them about crazy calls, emails or texts they may receive, and how to ignore them may save them from a lot of confusion.
These are just a few things to discuss when you have the “money talk,” which is very important before they go off to school. Good luck!
