Of all the lessons we teach our kids, there’s a growing trend that the financial side of things is often the least touched-upon aspect of life. When they move out of the home to go to college, however, they’re going to find themselves thrust up against the truth of what it means to be financially independent. Unfortunately, the mistakes some of them can make here can have dire consequences for years to come. That’s why it’s important to send them off with the following lessons.
Lesson One: Know your money
Losing track of one’s spending, and losing grasp of one’s bank account in the process, is a habit that’s all too easy to slip into. There are budgeting tools of all kinds, but one of the most useful is Meet Cleo, sending alerts directly to your phone with updated information on bank account balances, spending habits, and more. The best approach to a budget is a proactive one, however, so teach your kid the value of setting aside money for different costs, including a little spending money for themselves.
Lesson Two: There’s always a deal to be found
Part of the budget is also finding out what, exactly, your expenses are for the month. Part of divining that is learning that there is almost always a more cost-effective option. Teach them to take advantage of the many price comparison and deal-finding sites on the net. There are some college-specific costs that have specific sources of deals, such as Textbook Solutions to make their reading list much more affordable. Learning to rent or go second-hand with longer-term resources can end up saving them quite a lot over the course of a year.
Lesson Three: Debt can creep up you
For many young people, college is their first opportunity to get into real debt. Many banks offer some of their best overdrafts on student accounts, and credit cards can be a smart way to make use of credit. However, some make the mistake of treating credit like “free money” and entirely put off the “paying it back” aspect until it’s too late. Teach them a solid understanding of credit, how it can impact their future financial health and borrowing potential, and that having a debt management strategy is mandatory.
Lesson Four: You got their back
There are some boundaries to be placed when it comes to financially supporting one’s’ kids. You don’t want to be the “bank of mom”. However, you know that you’re going to be there to help them long after college, not just during it. If they get into financial trouble, having someone they can turn to for advice, someone with more experience and a little wisdom to share, can help not only highlight solutions but deal with the very real and harmful stress that comes with financial trouble. No matter if it’s embarrassing or self-inflicted, let them know they can discuss money issues with you.
You can’t hold their hand through every purchase and money-decision they make, but frank, honest, and informative conversations with your kid about money is crucial. Let them know not only the right way to handle their funds but also the real consequences if they fail to.
