For freshman, college is an exciting period of time. For many, it is the first foray into the real world where independence is a new learning experience. Having the freedom to make daily, personal choices can be a big deal to students not used to having unlimited boundaries. New students, especially those far from home, will likely need to learn how to manage their own time to incorporate a new world of classes and work together with friendships and fun.
Many students start out their college life still financially dependent on their parents or other family members. Not only can this help relieve some of the pressures on a student, it is often thought to be a parental obligation. However, a major mistake on both the parent’s and student’s part, is not teaching the student about financial responsibility right from the beginning. Even if the intentions are good of the parent who wants the child to focus solely on school work, by not learning the financial responsibilities of the real world, there could be more harm than good later on in life.
College is the prime time to teach children about what it takes to save money, spend wisely, and pay their bills on time. The subject can even be presented as early as during the application time for college. Even if parents are footing the entire bill for school, children should still go through the process as much as possible alongside their parents. Understanding the basics about how much an education costs, comparing school tuitions, and understanding how college loans work, can be an excellent starting point for teach kids what happens in life after high school.
Following a lesson in the basics of paying for an education, parents and children should discuss other important topics concerning finances regardless of who is paying the bills. Some other key discussion points can be:
Financial Support – First and foremost, parents and children should discuss financial support expectations. Students should be fully aware of what they can expect from the parents. In turn, if the student is expected to contribute to the financial planning, it should be made clear who is responsible for which expenses.
Budgeting – Sorting out daily living expenses with your soon-to-be-gone college student can be an eye opening experience. Many times, kids take for granted that the electricity works, the dishes are done, and there is food in the refrigerator. By helping them understand what it costs for basic necessities, they may be less likely to huff and puff when you reject their pleas for more spending money in the initial weeks.
Credit Cards – Depending on the mileage between home and the dorm, some parents will opt to have a credit card to be used for emergency purposes. Clearly communicating a parent’s expectations of credit card use is essential. Students who know the ground rules for spending inside and out will be more likely to spend wisely and per expectation. This may head off many rounds of overspending arguments.
Employment – As part of the above discussion topics, students who are expected to provide all or some support towards expenses, should discuss the need for student finding a job on campus or in town prior to the student’s departure.
Overall, there are many important financial aspects to be covered with a new college student. This time in their lives is a key component in the foundation of good financial habits in the future. What kids learn early in their young adult life will likely stay with them for years to come. It is part of the preparedness process that all students should be equipped with before leaving home. The more open and clear communication is, the better chance a student has at practicing solid financial habits and making wise financial decisions.
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