The Best Financial Tips For New College Students
Your student has successfully navigated high school, toured campuses, applied to and been accepted into college. All summer, they’ve dreamt of the momentous day when their new life away from home begins, as well as all the freedom and responsibility that comes along with it. As a parent, you know they’ll learn much more than academics – so to ensure they have the means to make sound financial choices, share these four financial tips for new college students.
1. Live Within Your Means
For most first-year students, living solely within budgeted monthly expenses is uncharted terrain. To avoid unnecessary funding shortages, one of the best tips for new college students is to sit down with them before they head off to college to cover every aspect of their budget. Show them how much money should be allocated for:
- Fun money
Explain the importance of a cushion for incidentals, but warn them about the risk of burning through all their spending money in the first month of school and finding themselves broke for the remainder of the semester. If that does happen, turn it into a learning opportunity. To stay on target with finances and safeguard against overspending, suggest they use budgeting apps, like Mint.com and Pocketguard.com.
2. Be Credit Card Savvy
Being very careful with credit cards is another one of the most important tips for new college students as young adults get bombarded with offers. While college is a good time to establish credit history, it’s also easy to get into credit trouble. Different card offers can be confusing, with fees hidden in the fine print.
Walk them through a credit card statement so they understand how to review the charges, check the interest rate and look for any additional charges or fees the credit card company might slip into the bill. Talk about making smart credit choices, how quickly interest and late fees add up, and emphasize that it is NEVER an option to not pay the bill in full. Help your student create perfect credit habits starting from their first credit card.
When sorting through credit card options, have them start with a credit card with a low limit, or consider sticking to a debit card instead. That way, your new college student can learn to use credit responsibly without causing too much damage.
3. Shop Around For Banks
Banking might seem like a no-brainer, but each institution is different and therefore has varying fees for checking and savings accounts. To begin, have your son or daughter research credit unions or local banks near the college which might have special offers for students. Explain how to write a check, reconcile balances and use a debit card. Other savvy banking tips for new college students include:
- Have them find the ATM locations on campus so they know which banks they are associated with and understand the fees they might need to pay for withdrawing money (those small charges add up!)
- Stress the importance of managing money so they don’t incur hefty overdraft charges
4. Have Them Help
If your child’s coursework is not too demanding, have your college student work a part-time job and set aside a portion of the money earned to help pay for college. A job will build professional skills, which will give them a jump start when applying for a job after they graduate from college.
Plus, young adults tend to be more thoughtful about spending funds they earn themselves compared to money that just magically appears in their bank account each month. If a part-time job doesn’t work with their schedule, have your student explore seasonal job options during the holidays and summer months.
Need Help With College Planning?
At Westface College Planning, we help parents and students uncover the real costs of college and create an affordable college funding plan. If you have questions about how to pay for college, or want more financial tips for new college students, contact us today with your questions!
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