Give your child a boost into financially savvy adulthood.
Kids learn the ins and outs of money management at home. Yet only 26 percent of kids ages 13 to 21 say their parents taught them about personal finance, according to the Jump$tart Coalition for Personal Financial Literacy.
If money wasn’t brought up at the dinner table before your child went off to college, it’s not too late. You can still help your college-age children learn about student loans, credit card debt and managing their own bank accounts. Financial expert Kristy Vienne offers this advice for parents of college students:
- Ensure your child accurately gauges how much income they have every month—and that they are tracking their expenses. Once kids know these numbers, they can create a budget.
- Encourage your child to compare prices when grocery shopping or buying school supplies.
- Help your student open a savings account. Setting aside a little money from each summer or part-time paycheck might discourage him or her from relying on credit cards.
- Warn your child about abusing credit cards. Even though there are restrictions on marketing to students on college campuses, some credit card companies still pursue them by phone and email. Discourage your student from using credit to pay for books or tuition. If he or she must use a credit card in a pinch, teach him or her to pay off the card balance to avoid finance charges.
- Consider giving your child a prepaid card, like Nationwide Bank Buxx, which can be loaded online or by phone. You can monitor spending together while encouraging financial responsibility.
- Teach your child about debt. Student loan debt exceeded credit card debt for the first time in 2010. USA Today reports that tuition is outpacing inflation and some students are borrowing more than they had planned for because their parents have lost jobs in the recession.
- Exhaust all options for federal loans before considering private loan programs. Then, urge your child to figure out what he or she will owe per month once student loan payments come due. Your child may be able to pay a nominal amount per month toward their loans while still in college.
- Help your child keep track of borrowing to decrease the chance of defaulting on a loan. This black mark on your child’s credit could prohibit him or her from qualifying for a mortgage or car loan well into the future. Download forms for keeping track of student loans from FinAid.org.
- Student Loan Problems: One Third Of Millennials Regret Going To College (financialsurvivalnetwork.com)
- The Student Loan Debt Crisis in 9 Charts (motherjones.com)
- Woman Says She Never Plans To Pay Off Her $186K Student Loan Debt. Will This Be The New Normal? (madamenoire.com)
- Experts: student loan debt is not like the housing bubble (redalertpolitics.com)
- The Great American…Loan (ipledgeafallegiance.wordpress.com)