You’ve helped your teenager pick their university and classes. You’ve got them settled into their new dorm and have given them the pep talk that everything will be great and for them not to be nervous (even though you’re probably more nervous than they are!)
Before you leave them on campus though, talk to them about personal finance. This is a great opportunity to teach them smart money skills to give them a head start as they embark on this new chapter of life.
Here are my top five tips:
Take advantage of student discounts
How I miss those discounts! There are many vendors, restaurants and services that offer discounts for college students. If you’re or they’re not sure, just ask! You can help your child save hundreds of dollars in a year.
Beware the credit card
Credit card companies are lions that prey on new students who are inexperienced with dealing with money and banking. They’ll entice them with gifts and “introductory low rates.” They bet on “cash-strapped” students paying the minimum balance and racking up late fees. And they wager on parents bailing their kids out from credit card debt. Do don’t let your child (and yourself) get sucked into their tactics.
There are a couple of choices you can help your child make:
1) Go through the different credit card options with them and discuss the pros and cons. 2) Set a low credit limit 3) Make a note together of the approximate payment due dates. Send your child reminders or 4) Forget about the credit card and opt for a prepaid debit card instead which sets an actual cash spending limit.
Save on textbooks
Brand new textbooks can cost hundreds of dollars. If, on the rare occasion, your professor has updated the curriculum and book criteria, then you may have no choice. But it’s not a common practice. So, before you’re tempted to buy brand new textbooks at the campus bookstore, remember that there are other ways to get the books you need without shelling out a lot of money.
Search for posts on campus bulletins by other students who are selling their second-hand books; go shopping on Amazon; or ask the bookstore if they have a “used books” section.
Protect personal information
Identity theft is on the rise, and university students are often the hardest hit and the most unaware about it. Here’s how they can safe guard their personal information:
1) Avoid sharing passwords with friends 2) Guard important numbers such as your personal identity number, ATM pins and credit card CVV (card verification value) 3) Have important documents mailed to a permanent mailing address rather than the dormitory or university campus where it may not be as secure 4) Avoid paying bills in an open Wifi environment, and 5) Regularly check bank and credit card statements for unusual transactions and report them immediately.
Create a debt reduction plan
If your son or daughter has taken out a student loan to fund their education, it may feel like free money to them. But as we know, nothing is free in life, and inevitably they’ll need to repay that money. If they’re lucky, the arrangement on the loan is such that the interest charges won’t kick in until after they finish university. Nevertheless, it’s smart to work with your child on a debt reduction plan starting now.
Teach them that they need to be responsible for their money and saving is always important – even if it’s a small amount. Discuss whether getting a part-time job is an option during school. And help them with a plan to put away a portion of what they earn towards a “loan repayment fund”.
I’m fortunate my parents talked to me about money when I was younger. I know that many kids have not been so lucky. Your children are looking to you as their parent to guide them. If it’s not you, they’ll learn how to manage money from their peers or the credit card companies – possibly the hard way. Do you want that? Have the talk. Be their money mentor.
If money is a tough topic to get your head around, and you’re looking for a coach to guide you, send me an email and we can have an introductory session. There’s no obligation. Email me today!