In just a few short months, thousands of kids across the country will head off to college—one of the biggest adventures of their life.
It’s also a very, very expensive adventure for young adults, and often for their parents, too. In addition to paying for tuition and books, students will need a place to live, clothes, food and more.
Before your child heads off to their first dorm room or apartment, make sure you’ve given them these parting lessons about money. (And if you need help imparting this wisdom, remember that your CommonWealth One membership comes with a ton of benefits, including free educational content. (Check it out here.)
- How to create a budget. A budget can be super helpful for students who don’t have an endless supply of cash. And those pizzas can really add up! Make sure that before they start classes, they write down how much they can afford to spend every week or every month in categories like food, rent, utilities, clothing, entertainment and any vehicle expenses—and keep track of their spending through online tools. Keeping track of their spending will help prevent unpleasant financial surprises.
- How to identify wants versus needs. Even kids who are nearing the end of high school may have some impulse control issues. That afternoon latte, that cute new jacket… those are both wants, not needs. Make sure your children know the difference and understand how wants can affect their financial health.
- How to find discounts and use coupons. Paying full price is almost never necessary if you know where to look for coupons and discounts! It’s a good time to introduce your child to the circular at the grocery store, teach them about store brands and enroll them in relevant rewards programs that can save them money.
- How to start saving and investing. This is also a good time to make sure your child has not just a checking account, but a savings account, too. Teach them about how interest works and the value of saving and investing money for future needs (and wants). If they are working in a part-time job while in school, encourage them to divert a portion of their paycheck into a savings account.
- How to use credit wisely. There’s a good chance that credit card companies will start targeting your child as soon as they turn 18. Do they understand the risks of running up a credit card bill? Do they know about compound interest and how it can make it hard to pay off that bill? Do they know about credit reports and how it can affect their life in the long term? Teaching them to use credit responsibly is one of the most helpful things you can do.
In addition, most colleges offer a personal finance course as an elective. The sooner they take that class, the better off they’ll be in the long term. They may even come home for college break with some lessons for you!
If you’re looking for assistance with student loans or college expenses, remember that we’re here for you and for your student, for life. Just make an appointment, stop by a branch or contact us through online banking to chat!
Congratulations on launching your child into adulthood! We hope they have a wonderful year filled with positive adventures.
