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As your teen prepares to go off to college for the first time, they’ll have to learn to manage their money well. It comes as no surprise that most teens struggle with this the first year or two but teaching your child these five lessons early will help prepare them to be successful in college.
1. Teach them that bills always come first. When your child is living independently for the first time, they will be tempted to spend their money on fun things they’ve never had before. However, if they’re not careful, they won’t be able to afford the essentials. Make sure you go over a budget with them and teach them that they should always have enough to pay bills before spending for leisure.
2. Be clear in how much support you will provide. If your child goes to school full-time, they may only have time in their schedule for part-time work. It is essential to be clear on how much financial support you will provide and stick to that plan, so they learn to be responsible for the rest.
3. Teach the value of saving. While your child may be living on a tight budget, it’s important to teach them to save while in college. Even the smallest savings can help if they lose their job, have an emergency, or want to do something fun over the summer. As little as $50 a month can add up and help them feel more secure while away from home.
4. Use credit cards wisely. Helping your child get their first credit card can be a wise way to help them start building credit and ensure they can pay for emergencies. However, the temptation to use it irresponsibly will be strong, so make sure your student knows the responsibility of a credit card and takes it seriously. If used irresponsibly, credit cards can harm their credit instead of helping it, so have a conversation about responsible payment before signing them up.
5. Remind them that college is an investment. Most kids don’t realize the magnitude of the investment that is a college degree. College is expensive and sometimes comes with massive amounts of debt. They need to remember that the return on investment is much higher if they finish and make good grades.
With these tips and a little bit of learning as they go, your child will be well-equipped to handle a college campus. You can start teaching these lessons as early as you want, just as you can start saving for college at an early age through various investment avenues. If you’re ready to learn more about college saving plans, contact OneAscent today.
-Heath Morris CFP®
Senior Lead Advisor