Summary
Preparing your child for college goes beyond academics; it’s about equipping them with the financial skills they need to thrive. It’s the perfect time to have the tough conversations and prepare them for the adult world!
Here are five essential tips to help your kid become financially fit for college and beyond.
Time For Money Talks
It’s time to get real on money. From the uncomfortable to the necessary, money talks give your family clarity on the family financial situation and what each member needs to do to help strategically build financial well being.
First, its time to get down to specifics. Sometimes, student’s poor financial decision making is a broader family problem. Lack of financial transparency within a family may delay the development of a healthy money mindset, which is necessary to build generational wealth.
Instead, talk about money frankly: What are the family financial goals? How much wealth has the family built? What are the financial priorities?
Next, dive into the true cost of college. Without discussing it, how do you really know? The cost of college goes far beyond tuition. It also includes student fees, books, relocation, travel, and everyday living expenses.
Who is funding which costs? This is a direct question that needs to be asked and answered so everyone knows their responsibilities as they prepare for college.
Financial Aid
Regardless of your family’s financial background, make sure your kid submits their FAFSA. There are “more than $112 billion in federal financial aid each year” and all it takes is completing and submitting the application to be considered.
Encourage them to attend financial aid workshops and stay informed about deadlines to maximize their financial aid opportunities. There are more options outside of scholarships. Some opportunities, like work-study, provide work experience in addition to student income!
Your kids should get familiar with the campus offices that handle grants or student financial support. Encourage them to establish great relationships with key faculty who can help them find the right scholarships, grants, or funding for their academic dreams. Relationship-building and social capital can really help them win academic advocates and financial sponsorship.
Student Budgeting
As students start this new chapter in their lives, new pressures and stress can add up without a proper financial plan and money management skills. Cue the financial planning star of the show: the budget! It’s an essential tool for financial well-being as your kid gets closer to adulthood.
A student budget should tell the student’s current and future financial story. Income like financial aid and part-time work earnings should be compared with expenses like tuition, rent, food and transportation. Outline each monthly income and expense to help them understand their full financial picture and how much money they have available to spend on their needs versus their wants.
They should get into the habit of reviewing their budget each month and tracking how well they did in keeping within their budget limits. With any new scholarships awards or study abroad expenses, the budget should respond to these new pieces of information!
Luckily for you, OneUnited always has you covered. Our AI-driven, financial wellness tool, WiseOne™ Insights, provides personalized insights based on your spending behavior to help you make better financial decisions. With Money Management, our one-stop location to manage your finances easily and securely, you can help them set up and manage their financial plan.
Shopping For Value
Certain subscription services have student rates or allow students to access bundled services that might be beyond a reasonable budget when sold separately. From software like Adobe for design and Codecademy for coding, to entertainment platforms like Amazon for shopping and Spotify for listening, student discounts are waiting!
When updating subscription payments, Subscription Management makes it easy to see subscriptions at a glance and make adjustments with one click.
Remind your kid to always carry their student ID in case they encounter student discounts wherever they go. Concerts, clothing retailers, transportation, fitness and more often offer discounted rates to build relationships with students early on.
Building Credit
If you haven’t already, now is the right time to start talking about credit, what it does, and how to stay ahead in the credit game!
Without a steady stream of income, your child will most likely need you to become a co-signer on their first credit card. This is one of the most effective ways to build credit. You will need to walk them through checking their balance and paying their costs on time.
Effectively managing credit also requires understanding your credit score, credit utilization, and when to use a credit card, amongst other credit strategies.
By teaching your child these financial skills, you’re setting them up to overcome many of life’s financial challenges.
For additional resources, we encourage your kid to get #FinanciallyLIT during the school year. Financial literacy is a year round activity!
