PERSONAL FINANCE TIPS FOR COLLEGE STUDENTS
#1 - ESTABLISH A GOAL OF FINANCIAL INDEPENDENCE
- This should be the final stage in the journey from financial dependence to independence!
- Students should become increasingly responsible for expenditures. Develop a shared understanding of parent and student responsibilities for financial needs.
- Your student will develop financial confidence by beginning to fly solo during these years.
- Ensure that your student knows how to balance a bank account.
- Remind your student that you will continue to be a financial mentor and will help keep him or her on track.
- Allow the freedom to make mistakes while keeping an eye on the broader picture to prevent catastrophes.
#2 - TEACH YOUR COLLEGE STUDENT TO USE A BUDGET
- The AICPA provides one resource. www.360financialliteracy.org/Tools/Calculators/Student-Budget
- An emergency fund of three to six month of expenses should be part of a college student's savings plan.
- Students should anticipate and save for major purchases.
- Consider periodic check-ups that allow you to discuss financial progress and provide a venue for answering questions and mentoring students.
#3 - EDUCATE STUDENTS REGARDING DEBT
- Strongly caution your student regarding the risks associated with excessive debt.
- Illustrate the length of time required to pay a credit card balance when making only minimum payments.
- Encourage your student to save for purchases and pay cash for them.
- Ensure that the student understands the implications of student loan debt.
- Continue to emphasize the virtues of patience and restraint involving financial transactions.
#4 - CONTEMPLATE FINANCIAL IMPLICATIONS OF CAREER CHOICES
- Your college student should research the availability of jobs in his or her field.
- Encourage your student to understand anticipated compensation, benefits and other elements of potential jobs.
- Will your student need to travel to job interviews? Will relocation be necessary when a job is secured?
- Ask your student if he or she will incur expenses for special resources, additional education/training, certifications, tools/equipment or other items to obtain the desired job.
- How long will it take to obtain a job in the chosen career? What financial resources will be necessary during the transition period? What is the magnitude of student loan debt versus anticipated compensation?
#5 - KEEP AN EYE ON THE FUTURE
- This is an opportunity to share in the excitement of your student's transition from college to career!
- Your student should contemplate expenses that will arise when he or she begins employment. Has your student considered housing, transportation, insurance and other financial elements that will apply after graduation?
- Your student should reflect upon this transition phase in order to paint a realistic picture of the future.