5 Practical Money Skills for College Students
Practical money skills are essential to creating lifelong good money habits. For students, developing proper financial habits right from the start puts them on a positive path to becoming financially independent.
To help your student, take time to help them navigate financial waters before they are on their own; they’ll be more likely to avoid trouble with credit cards, overdraft fees and other tricky economic woes. Here are a five savvy money steps to take now, so you don’t have to bail your son or daughter out later.
1. Budgeting for College Students
If you deposit a semester’s worth of spending money in your student’s bank account at the start of the term without discussing ways to make it last, don’t be surprised if you get a phone call asking for more money before the term is over.
To make sure your son or daughter has a clear picture of their monthly expenses, go over costs for transportation to and from school, store-bought food versus dining out, textbooks, school supplies, toiletries, clothing
2. Talk About Credit Cards
College students get bombarded with credit card offers, and it can be tempting to take the bait, especially if funds are tight. Talk with your son or daughter about how to choose an appropriate credit card and how to use it responsibly to avoid damaging their credit score.
You’ll also want to discuss other credit card tips, such as being aware of common fees and reviewing the credit card statement every month. This conversation should include other options such as using a debit card, a credit card with a low limit or a secured credit card to help minimize the damage caused by slip-ups.
3. Let Them Learn from Money Mistakes
There will be money mistakes – we all make them – but let your student learn from them. A little bit of struggle and living on ramen noodles for a month won’t hurt your son or daughter, and it may drive home the point that practical money skills are important.
4. Working in College
In 2017, The National Center for Education Statistics reported 43 percent of full-time undergraduate students had a job. Some of the benefits of working during college include that it helps minimize school expenses, creates some “fun” money, and allows the student to gain professional skills they wouldn’t acquire from a classroom setting. A part-time job – even just a few hours a week – may be all the motivation your student needs to take ownership of his or her finances.
5. Online Resources
There are online resources that can help your son or daughter learn practical money skills by creating and working with a budget and suggesting ways to cut down monthly expenses. Here are three sites we recommend, Mint.com, MyMoney.gov or BudgetTracker.
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