Parents hope the basic principles they instill on their kids – honesty, confidence, work ethic and compassion – will accompany them to college. After that, those life-enhancing habits that usually come through experience are just a bonus. Stable cash-management strategies are among the most elusive traits for high schoolers. While some work their first jobs in high school, college-bound students struggle with long-term budgets, disciplined spending and volunteer restraint.
Your child will learn money-management strategies one way or another. Why not start preaching disciplined financial values early? You could save her countless nights of eating ramen for dinner. Whether your pride and joy struggles with credit card spending, paying bills on time or maintaining a budget, these cash management strategies will enhance your child’s college experience.
Budgets Don’t Budge
According to Bankrate.com, 40 percent of American adults don’t have a budget. With the country drowning in debt, it’s time parents re-embrace the basics of sound personal finance. Rule number one: draft a budget. Structured spending is particularly important in college, where books, clothes, sporting events and parties threaten to suck the life out of any bank account. Whether on scholarship, working or receiving allowance from home, the ability to allot a set amount of money for life’s necessities is an invaluable skill.
Emergency Plastic
No parent wants their kids to be poor, hungry and alone at college. While such a scenario is unlikely, many react by shipping their scholars so-called “emergency” credit cards. By the time they reach their final year of college, 91 percent of students have at least one credit card, according to CBSnews.com. While you envision this card as a last resort, your child may see it as a remote portal into your wallet. If your child has a credit card, discuss the proper uses and potential consequences, such as a late-payment penalties, interest and a poor credit score.
If It’s Broke, Fix It
Experience is the best teacher. As your kid enters the next chapter of his life, maybe its time to cut off the allowance upon which he has depended. Working teaches the value of a dollar and instills a heightened sense of responsibility. According to Kansan.com, students who work part-time jobs get better grades than students who do not work. As they balance work and school, students develop time-management skills and build their resumes.
It Rains at College
The last thing a college student wants to think about is a financial safety net. After 18 years of living with parents, students relish the chance to break free of restraint, restriction and reality. Life happens in college and a savings account can be a vital safety net. Teach your child the merits of saving for a rainy day. You probably have every intention of supporting them financially in a time of need, but later in life, they’ll be on their own. Or, worse yet, they will “boomerang” home after college. Better to learn that lesson with room to fail.