The college year is right around the corner. Whether you’re heading out for a new life in higher education or you are the parent of a college-bound student, this two-part series offers some timely advice from a mom and a student who have been there.
Perhaps the best gift parents can give their college-bound children is the tools to begin their adult lives on a solid financial footing.
Take the time this summer to talk openly and honestly with your student about the importance of money management, says Tami Rechtenbach, vice president of member services at Dupaco Community Credit Union.
College financial planning tips
Rechtenbach, whose daughter graduated from college in May, advises fellow parents to cover these five topics to help your child gain financial confidence and independence:
- Budget basics: Teach students the importance of budgeting before they head off to college. You won’t be able to monitor their spending as much as you could when they were at home so it’s important for them to understand how to manage their funds.
- Establish credit: Having a credit card is important to boost their credit score and teach them fiscal responsibility. But get the card from an institution you trust, like Dupaco, and help your student learn how to manage that card and avoid overspending.
- Overdraft fees: Most young students don’t balance their checkbooks the traditional way that their parents do. They depend on online banking and ATMs to give them their balance. Make sure they understand how the overdraft fees affect them and how to avoid that.
- Student loan debt: Try to manage the student loan debt. A good rule of thumb is to not have more in student loans than you’ll make in the first year of your chosen career. It’s easy to get that check and spend it on computers, cars and entertainment, but paying it back will be difficult if you over-borrow.
- Scholarships: There are tons of scholarships available. Encourage students to apply for as much as they can and use the college advisors to help them find that money.
Read college prep tips from a recent grad
By Emily Kittle