Preparing Your College Bound Kids to Be Financially Responsible
When it comes to helping your students make a successful transition to college, and adulthood in general, one of the most important things you can help them with is learning how to handle their finances. Student who have developed good financial habits with your guidance are more likely to make smart money decisions when they are far from your watchful eyes.
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It’s never too early to help your student learn how to be financially responsible. Most young kids are pretty quick learners when it comes to money matters, so teaching them to save at least some of the money they get as gifts for college can be a good place to start. As they get older, take advantage of any opportunity that arises to help them learn to take responsibility to earn at least some of the money they need for a special trip or the latest fad. Placing some financial responsibility on older high school students for at least some of the cost of their transportation, spending money, or something else extra they may want is a good way to prepare them for handling their money in college. Here are a few other things you can do to help your student as they begin to seriously consider college:
Talk to them about paying for college. Before your students even begin their college search, sit down with them to talk about the financial realities of college. Students need to be very clear on how much they will reasonably be expected to contribute to the cost of college and whether or not they will be expected to find other aid for college. This information is vital to their being able to decide which schools would be a good financial fit for them.
Help them develop a budget. If your student has a part-time job, help them come up with a budget that allows for spending money, as well as other financial responsibilities they may have such as gas. Be sure that their budget includes a percentage of their wages that must be saved for college tuition.
Stress the importance of applying for scholarships every year. Help them understand that applying for scholarships is part of their responsibility in helping offset some of the cost of college. That responsibility should continue once they get to college where they may have access to new scholarships.
Involve them in filling out the FAFSA (Free Application for Federal Student Aid). Make sure they are right there when you apply for financial aid for college so they know what’s involved and how to do it. Most of the information required is theirs anyway.
Discuss your financial ground rules for them. Decide what you will and will not pay for while they are in college. If you expect them to have a job while they’re in college to pay for things like their cell phone or books, be sure they know that.
Talk to them about credit cards. While recent changes in the law have made it a little more difficult for college students to get a credit card, it is not impossible. To many kids, credit cards seem like the perfect answer to getting everything they want at the moment they want it. Help them understand how quickly accruing interest charges can put them deeper in debt than they intended.
Encourage your student to look ahead. Engage your students in a discussion about living off campus before it is imminent. Remind them that in addition to rent and other living expenses, they will need to have money put aside for a security deposit as well as for having utilities turned on. Going over the costs of living off campus with them while they are still living in the dorms can help them be better prepared for the financial responsibilities they will be taking on when they do decide to make a move.
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