It’s amazing how time just passes us by as parents. It seems like we go from bringing our babies home from the hospital to dropping them off to their college dorms in a blink of an eye! Typically, the question is: Have you prepared your finances to be able to afford college for your child? But, this question is different: How financially prepared is your child for college?
Become Familiarized With Budgets
If your teen has not had a job before, and has relied on you as the ATM it will be a rude awakening for both of you. Having a job is good. For those of us adults who do work, we know that it gives us a sense of responsibility and helps us prioritize our spending habits between pay checks.
However, if you’ve always given your child the money they need for going to the movies, buying lunches or attending concerts, then your child will see no reason why you shouldn’t do the exact same thing if they get into financial trouble while away at college.
Get a Bank Account
In order for your teenager to really get a true picture of his or her finances, open up a bank account. This way they can truly understand the meaning of a deposit and a withdrawal. In other words, if they don’t deposit money in the bank, then then there is no money that can be taken out. This will assist them in learning to save, understanding service fees, interest and experiencing the wrath of over withdrawals.
Discuss Credit Cards
Is your teen familiar with how a credit card works? Or does he or she just want one because they’ve seen you use it? Get an understanding of what they know and don’t know about credit. Those teens who simply want credit cards ,but have never thought or talked about money issues will likely be the first to run into financial problems. It’s a big enough adjustment just being a college freshman. Take the burden off of them early by showing them how to be a first year student with no unnecessary debt.
Don’t Rule Out Peer Pressure
If your teen is susceptible to being influenced by their peers and will do just about anything to make their friends happy, then it’s time to have a long talk with your child. You don’t want their friends to hinder their financial affairs and have a negative impact on your child’s future credit. If your child hasn’t resolved their peer issues, problem, the odds are high that their college friends may be able to talk them into making poor financial decisions.
Now is the time to have that talk with you child. Not only should you be ready financially, but they need to be ready too!