Are you a parent who is recently planning to watch your child leave home for college? If answered yes, this can be a bittersweet experience. After all the years that you spend to prepare them to enter the new world, it’s high time that you ensure that they’re ready to endure what the college brings. College life brings new emotional, financial and mental challenges and before you send your teen kid to university, you should make sure that your kid is entirely prepared to handle all kinds of situations that may arise. Nothing can be worse than acquiring debt while being away from home as this may force you to get help from the professional debt help companies. Have a look at some of the must-know personal finance lessons that you should impart to your college-bound kids.
- Learn to earn money: The fist money management tip that you should pack into your kid’s suitcase is the importance of earning money. Your kid will only be able to appreciate the value of money when he earns it himself. He will learn that it takes a longer time to earn money than it takes to spend it. This will help him avoid racking up debt.
- Evaluate the difference between needs and wants: Is it necessary for every college student to carry a credit card? In most cases, it is seen that college students are better off without carrying credit cards as they can at least stay off the temptation of whipping their plastics while making every single purchase. Remind your child time and again that heading off to college with a credit card is not always a prerequisite as you may tend to incur debt. Using cash instead of credit can at least help you maintain a good financial standing.
- Learn the importance of good credit: Soon as you’re out of college, you’ll land up in the already crippling US job market. Already there are too less jobs in the market and if you still want to grab a good one among the few, you need to have a stellar credit rating. Being a college-bound student, he may not be having the future in mind right now, but you should always maintain a good credit rating by paying your credit card bills on time so as to be able to grab a good job.
- Prefer debit to credit: For the college students, it is often easier for the students to spend the cash for eating out and then use their credit cards for the actual necessities. But this is a very bad habit as racking up credit card debt and making it a huge amount that you can’t handle on your own will lead you into a mess. Speak to your college-bound teen and ask him to understand the importance of using debit than credit whenever possible.
Understanding all the possible fees before taking out a credit card, checking your bank statements often and saving money are some of the other financial lessons that you should teach your teen kid before he bids you adieu for college. Take all the steps needed to avoid rushing to the professional debt help companies.