Sending Your College Freshman Off Financially Prepared
There's a lot of emotion involved in seeing your child off to college. You might be parting ways with them for the next few months, if not longer. It's also one of the first real shows of adulthood they'll ever go through. Among other lessons, one of the biggest things for your child to know about is handling money. These are ways you can give your college freshman the right financial guidance.
Have Them Set Up a Bank Account A bank account is a very useful thing for a freshman to have. During orientation, there might be booths set up by banks with branches on campus, encouraging students to sign up. Having a simple checking account put together can help your freshman develop their finance knowledge. They can also learn about the importance of things like savings accounts and avoiding overdraft fees. A great habit to develop is checking their account balance on a daily basis. They can get a better understanding of their spending habits and what changes they might need to make. This will also let them catch suspicious charges to their debit cards and inform the banks right away.
Send Them Money Your freshman will likely require your financial support during the school year. During the first year, it's important to focus on studies. Make regular deposits in their bank account or send them checks. Avoid snooping into their spending, but do take notice if they're requesting deposits at an especially frequent rate. That can be a sign they need to learn a lot about finance responsibility. Consider putting a rule in place about how much time has to pass before you're willing to make another deposit. If you've previously given them an allowance, this is another way for you to show them the importance of being careful with their money and not letting short-term desires lead to long-term consequences. Teach About Credit Cards Credit card companies love going after freshmen, as they've typically reached adulthood fairly recently and don't yet know the ramifications of debt. Talk to your freshman about signing up for a credit card. This can be a very useful tool in an emergency. However, there are many who will use these to buy something without realizing they'll have to pay off the debt soon, or face major interest penalties. You won't be able to control whether or not your freshman gets a card, but you make a big impression by telling them about what can happen if they're not careful. How someone uses their money can be more valuable than how much they have. Your college freshman might not have any plans for an economics degree, but that doesn't mean it won't be worth it to come in with some expertise and wisdom, passed down from you. Responsibility with money isn't something they'll be graded on, but it still matters a lot.