Your College Student is Halfway through their First Semester of College.
Are they learning the most important lesson of all?
Which is... how to live on your own, manage your money and pay your bills.
All too often, well-intentioned parents provide their college-age son or daughter a credit card to be used for necessary expenses and emergencies only, and then are horrified at the amount of debt their child is able to accumulate in just a few months’ time. This scenario can be devastating to a family’s finances and also to the parent/child relationship.
You can avoid this kind of financial stress by making “budgeting” and “money management” an essential part of getting kids ready for college, long before they head off to campus.
Following here is some financial advice for parents and their college students –- financial lessons to start now, even if your student is already halfway through their first semester.
Budgeting and money management for college students
3 MUST DO’s:
- Insist your college student put together a budget.
- Leave them alone to figure out their own budget.
- Put the budgeted money in one checking account that your student manages.
STEPS TO ACCOMPLISHING THE MUST-DO’s:
- Have your student brainstorm the categories of expenses they will face: Tuition, Room and Board, Clothing, Entertainment, Travel, Club Dues, Sports Dues, etc.
- Have them research and guesstimate the dollars for the different categories
- Do semester or quarter budgets so they learn as they go
- Expect push back, tears, and frustration as your student puts together their budget. Gently coach them through it.
- Decide who owns the budgeted money in their account. Is it funded by you, by them, by a scholarship, or a little bit from all?
- Move the dollars to an account that is managed by your student
- Do NOT step in and save them; they will figure it out
The life-long lessons learned
When a college student is responsible for the dollars they spend in college, many life-long lessons are learned.
- How to do a budget
- How to open a bank account
- How to pay your own bills
- How to apply and manage a credit card or debit card
- How to manage a budget
- Creative ways to live within your means
- How to make choices
- Ways to make money to fill the gap
- How to apply for a scholarship
And the greatest learning of all that they will receive? How to manage their money when they get out of school and for the rest of their lives. And with any luck, maybe with very little to no debt.
And, a sense of accomplishment and empowerment!
Budgeting and money management for college students can be a tough lesson for the entire family. Congratulations for taking it on.
If you’re ready to discuss financial planning that will allow you to Fund a Life You Love®, we’d love to tell you more. Let’s talk. It’s your tomorrow.
Call us for a complimentary 1 hour review. Call 513.618.7080 or visit www.lenoxwealth.com to Fund a Life You Love.
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