Starting college is an exciting and overwhelming time, and financial talks are often pushed to the sidelines in the face of packing, meeting new friends, getting used to a new campus and adjusting to a college curriculum. However, managing finances as a college freshman can be more difficult than all of the above, so setting aside some time to discuss is essential.
The Courier of Montgomery County offers 5 topics to cover in the conversation:
1. You’re spending real money. ” Understanding where tuition and other funds are coming from may inspire your child to spend more carefully,” the article explains. “Clarify that loans will have to be repaid with interest and while scholarships, grants and gifts may seem like ‘free money,’ there are expectations that they’ll be used responsibly.”
2. Budgeting for surprise costs. “Freshmen encounter many unexpected expenses like club fees, transportation costs and social dues. Tracking these – as well as any regular bills and necessary purchases – can help your child be more prepared in the future. Budgeting is essential, especially since students don’t typically have a significant source of income. Warn your son or daughter to avoid wasteful spending habits such as buying expensive lattes or disregarding ATM fees.”
3. Using credit is OK, if you do it right. “Though it may worry you to see a credit card in your child’s wallet, having knowledge about the importance of good credit and the role it plays in the future purchase of a home or vehicle can help young adults establish financial independence.”
4. Don’t try to keep up with your roommate. “No matter where your child attends college, there will be students who can afford – or who choose – to spend frivolously. Encourage your son or daughter to be conscious of their spending habits regardless of your family’s financial situation. If your child decides to splurge on a spring break trip or expensive night downtown, stress the importance of careful saving and budgeting well ahead of time to avoid ensuing debt.”
5. “We’ll help, but we expect you to be accountable.”