Wednesday, January 5, 2011

HELP BUILD SUCCESS IN YOUR COLLEGE-BOUND CHILD



In a couple of weeks, parents will be sending their teenagers (or young adults) off to college for the very first time.  Some will be living on campus and away from home for the  first time.  Today, I have a guest poster, Audra Barrick, from Rediscovering Domesticity, who is going to share some great financial tips for parents to arm their college bound students with.


As parents, we keep hearing how we need to make sure our  children know things earlier and earlier. How they should know how to read before kindergarten. How they should know the birds and the bees before third grade. How they should be able to do their laundry by age 12.

While these may be great goals, it can be overwhelming for us parents to keep up with what all our children should know and when.  Thankfully, our children won't be "ruined" if we don't meet every said goal.

I present you today with five things teenagers should know before going to college. The earlier these concepts are introduced, the better, but even if you already have teens in college, they can benefit!  It's never too late to start saving money.

  1. Balance a Checkbook.  Ideally, teens should learn how to balance a checkbook around age 16.  To best prepare your teen to be responsible with money, help him open a checking and savings account, set a plan together regarding the use of the money, and give him the responsibility of making the deposits (hopefully of money he has earned on his own) and withdrawals. Help him learn that money is not endless.  Don't be afraid to let him make mistakes - mistakes will help him learn! If he runs out of money, let him experience the reality of life without money (within reason - still feed him!).  In addition to recording all checks written, make sure your teen makes a habit of recording all ATM and debit transactions.  There is no easier way to become overdrawn than by not keeping track of all the outgoing money.  Trust me. I've done it. It's not fun!
  2. The Reality of Credit Cards.  It is a myth that credit cards are needed to build good credit.  Sure, some lenders seem to require this history, but many can be convinced to overlook it if the applicant  can demonstrate a history of paying regular bills on time or early every month.  If your teen will have a credit card, make sure he knows how the interest works, that he needs to pay off the balance each month (or at least pay significantly more than the minimum balance), and that missing payments has serious consequences.  Help him understand that there will be credit card "vultures" all over campus offering easy credit at every turn for a free hat or a free pizza just for signing up. Each sign-up will put a ding in his credit and cause him to have higher interest rates for years to come.
  3. Stick to a Spending Plan. Spending Plan is also known as a Budget, but without all the negative connotations. One crucial skill developed during the college years is the skill of planning and organizing for the future. Students learn to plan for upcoming projects, for homework, and for final exams. How helpful would it be for our children to learn to plan for upcoming expenditures? Give every dollar a name and a job before the paycheck comes in. As a bonus - learning to stick to a spending plan helps our  teens learn responsibility and delayed gratification in many other areas as well!
  4. Live on less than you make (or less than you have).  It is good for teens to learn the key to financial success early - live on less than you make.  Have an eye to the future. My first year in college, I was so excited to have more than $1000 in my checking account. That was more than I had ever had before. I was certain that would last me all four years! (Ha Ha!)  Thanks to a desire to not eat off my meal plan that was already paid for, I decimated that account in just one semester. Those little things really add up - pizza, clothes, pizza, oh - and did I say pizza?
  5. Set some money aside.  School loans allow up to six months after graduation to begin repayment (check your specific loan for details) and when that repayment date comes, it can be quite a shock. Teach your teen to get into the habit of setting aside 10% and not touching it except in an emergency (which doesn't mean that cute pair of shoes). My favorite rule of thumb is to set aside 10% for saving, 10% for giving, and the rest for spending.
It can be overwhelming to our children to be out on their own for the first time.  Arm them with practice ahead of time; arm them with your family values; arm them with your love.  Sure, they'll make mistakes, but they will fare much better than their peers who did not have practice ahead of time!


Audra is a former K-12 music teacher who now stays home with her two little boys . You can find her blogging about faith, life, and homemaking at Rediscovering Domesticity and can check out past financial posts on Penny Pinching Penquin








8 comments:

Olah Momma! said...

Hi, I stumbled upon your lovely blog and following it. I am also inviting you to add this at http://olahmomma.com/momlounge - a mommy blogger directory and more, where you can also meet more mom bloggers like you and get connected with them by visiting your profile after registration.

You can also add your giveaways and business links; or get featured by sharing your crafts, recipes and interesting musings.

Following us back is deeply appreciated. Thanks and have a great day!

http://olahmomma.com -- blogging and connecting blogging moms.
{all moms welcome}

Gaspegirl said...

WOW, that is some good advice! I am visiting from SITS and I am really happy that I did, Great blog!

Make it a great day!

shelley said...

hi there!
happy new year! thougth i would stop by and say "hi" and see what is happening in your cold part of the world... one of my "goals" not resolutions, i'll def fail if i call it that is to keep up with my bloggy friends more and write more...
this was such a great post! after having been there and done that we are now in the "next chapter" having a college grad ready to move on and out!
here's hoping we all have a happy and healthy 2011! stop by and say hi!
*waving,
shelley
http://im-stillstanding.com

Trista said...

I am your newest follower and would love for you to follow me back

http://andersonsangels.blogspot.com

CP said...

Hello! Great tips

Found you on a blog hop and am your newest follower - Would love for you to check out my blog and follow back if you like it.

Check out my "retail therapy" giveaways and enter a few, there are some great products to win.

I also have a fantastic weekly blog hop.

http://retailtherapylounge.blogspot.com

Carol

Mika said...

Great tips! Next Fall I will have
TWO in College! Yikes!
I'm following from the blog hop.
I'd love a follow back at www.mikaspantry.blogspot.com
Thanks!
Mika

Anonymous said...

thanks for the interesting information

Lisa said...

Congrats on your award from Mommy Only Has Two Hands! She is right, you have a great blog! I have 6 kids and 2 of them are teenagers. I'm now your newest follower!:) Would love for you to follow back.
http://RaisingFutureLeaders.blogspot.com
http://BlessOthersWithCards.blogspot.com

Also, if you have a Facebook Fan page, please say Hi on my fan page wall and I'll give you a special Shout Out! http://www.facebook.com/BlessOthersWithCards

Lisa xoxo

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