OMAHA, Neb.-College students are packing their bags and getting ready to go home for the summer. For many, last year was the first time they managed their own laundry, classes and curfew, and their own bank accounts, without their parents.
This continues as a time of transition for many young adults and their parents. They will need your help as they continue to grow in their new financial responsibilities and learn how to enjoy good money management for life.
Here are some tips from Manley to help you talk to your college-age students before they return to campus next fall:
Help your student work with a limited budget. Budget goals and priorities change over time. If your child had a part-time job while in high school, saving was probably the priority. Savings is not likely a college student’s top priority, but rather figuring out how to make the money saved last the entire semester or into the summer. Parents can help a student itemize and prioritize all the things the student will need to buy, such as clothing and sundries, textbooks, car or cell phone expenses.
Plan for mistakes and let your student correct them. No matter how good the student’s budget is, mistakes will be made. Some of them are minor, such as when a student simply forgets to budget to work fewer hours at a part-time job during an exam week or having to take an unpaid sick day. If that happens, a little help from mom or dad may be appropriate. But sometimes the mistakes are serious, the result of overspending and under-earning, and the student runs out of money before the end of the first semester. In this case, as difficult as it may be, don’t rescue your student. Help him find a way to fix the problem. If the student lives on campus and you paid for a meal plan, they won’t starve. You may have to find a way to work a few more hours or make sure you earn a few bucks during summer vacation.
TALK. More specifically, the talk about credit cards and how many credit card companies attract students to open accounts. Show your student how long it will take to pay off even a small amount of debt (here’s a useful calculator). Even a small balance of $ 3,000 can take up to 10 years to pay off, and during that time the borrower would have paid more than $ 2,200 in interest alone. Student loans, car loans, and eventually mortgages are often considered good debt. But credit cards in the hands of inexperienced users can be disastrous.
Let the student know you will be reviewing. From time to time, check your student’s bank balance. Look at expenses and deposits, and make sure she’s on track to make her money over the summer. As time goes on and the student gets better at handling money, you can let him handle it without your help.
College is such an exciting time and a time when young adults learn not only academic lessons, but life lessons as well. They still need me to show them how to avoid making money mistakes and how to correct the mistakes they make along the way.
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About the author: Through hard work, dedication, and passionate, professional attention to clients’ needs, Manley and his small team at his Farmers Insurance agency in Omaha, Nebraska have turned the agency into the agency from Farmers Insurance largest in the state. His agency is also the second largest in the entire Farmers Insurance region. Manley’s service to the community includes support for the Siena / Francis House, Restoration Exchange, Homeward Bound Animal Rescue, Ronald McDonald House and The Stephen Center.