If you have a student heading off to college, they’ve probably got visions of freedom and the good times to come, floating around in their head. And with all of the excitement of the first day of the fall semester approaching, how they’ll handle their finances during all of the fun is likely the last thing on their mind.
If you can impart some tips to your soon-to-be college student, now is a prime time to sit down and have a quick chat that could impact their financial future. Here are a few to help get you started:
- Credit cards are for emergencies. If your student is heading off to college with a credit card, remind them that it does not equal instant cash and should only be used in emergencies. Many students are already guaranteed to leave school with student loan debt – encourage them not to add to that further.
- Pay off a credit card balance on time. If your student is actively using their credit card during college, encourage them to pay off their monthly balance on time and in full to avoid paying interest. It will save money in the long run and help build positive financial management skills.
- Pay bills on time. While some students might not have any bills to pay during college, others will have student loan statements, car insurance, cell phone bills and more coming in. Stress the importance of paying bills on time to your student in order to start establishing a good credit history.
- Shop around for a checking account. If your student is setting up their first checking account before heading to college, encourage them to shop around. Search for institutions that offer accounts with low or no fees, no minimum balance and special offers for college students.
- SAVE. The earlier your student starts to save, the better. Encourage them to foster getting in the habit of stashing away small bits of money if possible. When an emergency or unforeseen situation happens down the road, they’ll be glad they took your advice.