Classrooms at universities and colleges across the nation have begun their fall semester and students are in full swing of their educational pursuits. You might have a child, grandchild, niece or nephew who is all set to spend their semester studying, socializing, and living on their own for the first time. You have prepared them for college life by teaching them how to shop for groceries, prepare simple meals, and even do laundry. Often, however, most college students begin this new chapter of their lives with little knowledge about making a budget and managing money.
A National Student Financial Wellness Study, the first of its kind released in 2015 by Ohio State University, showed college students’ biggest worries were actually not exams or terrible roommates but concerns about money. A little more than 72% of the students surveyed said they felt stressed about personal finances, monthly expenses, or whether they would be able to pay for college at all.[i]
A 2016 survey found that among students surveyed, 71% said they learned about money management from their parents.[ii] So take a few minutes and sit down with your college student today and share these tips. Your advice could help them not only during their college days but throughout their lives.
Financial Advice for College-Bound Students
Help your college student set up necessary accounts. College students likely will need at least checking and savings accounts.[iii] Start teaching them good habits now and ask them to research banking institutions that would be convenient for them to get to from campus or their residence.
Establish clear financial responsibilities. Determine who will be responsible for which expenses. If you are planning to take care of bills such as auto and health insurance, or cell service, be clear with your student that he or she is responsible for living expenses including rent, utilities, groceries, and other household costs.[iv]
Wean them off your bank accounts. It might be tempting to continue paying your child’s, grandchild’s or niece’s or nephew’s expenses to help them get a strong start, but that does not teach them to be self-sufficient; it is likely to make them more dependent on you.[v]
Decide whether a credit card is appropriate. Credit cards often give college students the most trouble. Credit cards are an effective way to establish early credit history, but it is common for students to run up balances without fully understanding how credit cards work. If your student gets a credit card, be sure they understand how credit cards work and how important it is to pay off the balance every month.[vi]
Will your college-bound student work during college? Holding down a part-time job while going to school has plenty of advantages. It helps cover living expenses or it gives them a chunk of money to save each month. It also makes it easier for them to manage money and gain valuable work experience. And finally, it looks great on their resume after they graduate and begin their career search.
It is never too late to sit down with your college-bound child, grandchild, niece or nephew and talk frankly with them about the importance of being financially responsible.
We are here to help you each step of the way, so please let us know if you have any questions about these tips or the bigger strategies that are helping guide you to your financial future.
Footnotes, disclosures, and sources:
Investment Advisory services offered through Coppell Advisory Solutions, LLC, dba Fusion Capital Management, An SEC Registered Investment Advisor.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker Dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
We have not independently verified the information available through the following links. The links are provided to you as a matter of interest. We make no claim as to their accuracy or reliability.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
[i] “Big Debt on Campus: Why Money Stress Tops Student Worries.” Learnvest. [Accessed July 1, 2017.] https://www.learnvest.com/knowledge-center/big-debt-on-campus-why-money-stress-tops-student-worries-123/
[ii] “Majoring in Money: How American College Students Manage Their Finances.” The SallieMae Fund. [Accessed June 30, 2017.] http://news.salliemae.com/sites/salliemae.newshq.businesswire.com/files/doc_library/file/SallieMae_MajoringinMoney_2016.pdf
[iii] “How to Financially Prepare Students Going off to College.” Redstone Credit Union. [Accessed June 30, 2017.] https://www.redfcu.org/tips-tools/blog/how-to-financially-prepare-students-going-off-to-college
[iv] “How to Financially Prepare Students Going off to College.” Redstone Credit Union. [Accessed June 30, 2017.] https://www.redfcu.org/tips-tools/blog/how-to-financially-prepare-students-going-off-to-college