The Pre-College Crash Course On Money Smarts

Sometimes, it’s easy for a parent to think that a child, especially one headed to college, has learned everything they need to from school or by osmosis. When it comes to money, it’s very clear that’s not the case. College-aged kids are one of the highest-risk groups when it comes to making financial mistakes that can leave them struggling and in debt. Money’s a big issue and a tangled one at that, so here are a few lessons well-worth sending your grown-up kids off with.

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The sooner the budget, the better

This is one tip that many a homeowner wished they had learned when they were younger. Budgeting your money is perhaps the best money tool you can learn. Calculating your incomings and outgoings, learning to prioritize different expenditures, and to notice spending habits all leads to a much more money-conscientious person. Along with the budget goes the need to constantly track one’s spending and update that understanding as time goes on. Nowadays, there are tons of apps and free software that can make budgeting all the easier, but it can be done with a little work even on free tools like Google Spreadsheets.

There are tons of ways to make money

College is expensive while you’re still in it. Beyond all the necessary expenditures, your kid should be having fun and making friends and often than can cost money. While you should tell them to always be on the lookout for the free attractions and events that university cities and towns constantly offer, they have to learn to supplement what money they have from loans and grants with a little effort too. Many college students support themselves with a job, but it’s understandable that this isn’t ideal or even feasible for the busier students. It’s worth taking a look at sites like ScottAlanTurner.com/50-legitimate-ways-to-make-money-from-home-in-2016 to help them earn some extra spending money in their free time rather than them having to sacrifice all their time.

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Credit cards aren’t free money

A lot of young people go out into the world without a serious understanding of how credit works. If they’re getting set up with a student bank account, then the big, flexible overdraft can look to the inexperienced spender like they just got a lot of free money. As can the credit cards you might help them apply for. Teach them about credit as soon as possible. Not only the fact that it’s borrowing, but how to manage their spending so they never spend more than their incoming funds can replace. It’s worth talking about their credit score and history, and how misusing their credit and falling into debt can end up jeopardizing future chances of getting a car or a home.

They will find a better price

Not only do you want them to be more sensible with how they borrow and use their money, but you want them to spend less of it as well. Young independent adults might very well feel the need to splurge of full-price now and then. But in the majority of cases, they can find the same thing for cheaper. With sites like BookMob.ca, that is most definitely true of the college course textbooks. The average course reading list is a lot more expensive than anyone expects, so make sure they’re not paying full price. Of course, there are tons of price comparison sites and deal-finding listings for them to take advantage of, too, so make sure they know about them.

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There’s always an option

Credit cards and overdrafts are one thing, but if your child is unable to get a card or a favorable loan, then a sudden bill or unexpected cost can really throw them for a loop. You can occasionally play the role of bank and help them with a fix, but it’s best to teach them to be independent. For instance, there are cash loan providers, and if you visit CaptainCash.ca/ontario/Hamilton, you can see some of them offer the terms of payment transparently on the site. Just make sure that they’re only borrowing if they’re getting a regular income whether it’s from a job or the kind of online side-gigs mentioned above. There are also plenty of student assistance programs for emergency funds in most colleges.

Be prepared for the student debt

The sooner your kid realizes that college most likely isn’t going to be free, the better. The average debt for students is around $27,000, which can seem like a crippling figure for most students who can’t expect to make that much in a whole year of post-graduate work. It will take them 9.5 years on average to fully pay back the loan, but not everyone fits in that average. There are different levels of debt relief, and the sooner they know they have access to them the better. The concern of a huge student debt hanging over one’s head has become a common concern in young graduates.

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Be careful with your details

As many of them are inexperienced with the thorough workings of their finances, many young students are also targeted by crooks for identity theft purposes. In the best-case scenario, their cards are frozen while the situation is worked out. But it can get a lot more expensive than that. They have to learn to be more private with financial information. Shredding any letters with financial details is a must, for one. When they go online, especially to shop, make sure they only use trustworthy websites that have a security certificate (which its noticeable for having ‘https’ in the URL rather than just ‘http’). They should keep a close eye on any mail that comes through and not just junk it if they don’t recognize it. They may very well be receiving bills they shouldn’t. Similarly, they should check their credit online regularly. Many services offer that much for free and it’s a good way to see if there has been any unauthorized spending under their name.

You can’t hold their hand throughout college if they’re moving away, but you can make sure they’re informed enough to make responsible choices. Of course, sometimes they may need help and you should be willing to offer it if you can, but they have to learn. So, make sure you’re offering more than a piggy bank for them to dip into. Give them real money savvy.