College is an important, but expensive time in your teens life. Taking the time to prepare your child financially for college is an important parenting step you won’t want to miss! Use these tips to help.
As a parent who wants your child to go to college, you’ve probably thought a lot about grades, tests, and campus visits. You may have thought about the financial side of things mainly in terms of how to pay for it, but there’s a lot more to getting your kid ready for college from a financial standpoint than working out how to cover tuition and the cost of living, as important as that is. Smart money management will give them great habits that they can carry throughout their lives.
Ideally, when you teach your kids about money, you should start early. Even children as young as four or five can start to understand the concept of money and incorporate it into play or help clip coupons.
Kids who are a little older can start getting an allowance and even have a bank account. This is a great way to start learning about saving. Later, if they have a summer job as a teenager, they can start budgeting and putting away some money in savings.
However, if you haven’t started earlier and your 17-year-old is headed off to college next year, don’t panic. There’s still plenty you can do, and the rest of the tips below will help.
Paying for School
This is a big chunk of financial preparation, and how you deal with it will depend on many factors, including the cost of the school, your own financial situation and whether your child is eligible for scholarships, grants, and loans.
If you are worried about your kid graduating with a large debt burden but you don’t have much in savings that allows you to help out, one option may be to take out a low-rate Private Parent Loan. You can also help them apply for other types of financial aid.
Make a Budget
Whether you’ve taught your child a little or a lot about money, one way you can really help them out is by helping them make a budget. How you approach this will vary depending on different factors.
For example, if you’re prepaying for a dorm room and a meal plan, then your child won’t have quite as big a challenge as someone who is going to be living off campus and making their own food.
Whatever the situation, work with your kid and the money that you know they’ll have to figure out what they can spend. Talk about strategies for saving money. They may want to download an app that will help them by tracking their spending for them.
Credit Cards and Emergencies
You might want them to have a credit card they can use in case of emergencies or just for little expenses that may come up that they don’t immediately have the cash for. Unless they are very fiscally responsible, it is probably best to do this with a secured credit card, where the money is put down ahead of time, or one with a low limit.
It’s very easy for college students to get into the habit of whipping out the plastic otherwise and finding themselves with a hefty credit card debt to pay off after graduation alongside their student loans.