Sure, you may have already talked to your soon-to-be college student about the importance of avoiding drugs, but have you talked to her about the importance of avoiding debt? Perhaps you don’t think of yourself as being competent enough to teach this topic to your teen, but you can get free expert help to guide your college student along the path to developing good money-management skills and achieving financial independence.
ScholarShop and The National Endowment for Financial Education (NEFE) offer a free, online booklet, “40 Money Management Tips Every College Student Should Know,” which should be required reading for anyone going off to college. In less than 30 pages, this publication will give your student a “crash course” in money management.
Topics covered in the “Tips” booklet include goal setting, record keeping, checking accounts, ATMs and checks, financial aid, scams, loan obligations, work-study jobs, looking for jobs, meal plans, snacks, computers, money issues, dorm vs. apartment costs, roommate ground rules, peer pressure, distinguishing between needs and wants, student discounts, car expenses, spending leaks, spending plans, good credit, avoiding credit card pushers, keeping friends and money separate, debt management, saving habits, investing, net worth and more.
For example, if a student decides she must have a credit card, here are the eight ways they suggest she can maintain control:
1. Keep only one major credit card.
2. Shop around for a card with no annual fee, a low interest rate and a 20- to 30-day grace period. You can shop online for the best credit card deal.
3. Consider a card that’s secured by a bank deposit, meaning you have enough in a savings account to equal the credit limit of the card. This can help build a good credit history.
4. Except for real emergencies, don’t charge anything you can’t pay in full this billing period. (Emergencies don’t include new clothes or eating out.)
5. Mail the payment several days before the due date so you aren’t charged a late fee.
6. Think of your credit card as a loan, and don’t buy anything you would not take out a loan to buy.
7. Subtract credit card purchases from your checking account so you have enough to pay the bill.
8. Do not take cash advances on your credit card. You’ll pay a fee, and interest charges will accrue immediately.
Remind your student not to loan her credit card to anyone, not even a good friend or her roommate. It does not matter who uses the card, she will still be responsible for paying the bill.
As a final note, the Tips booklet says, “money is important, but it’s not everything. Good friends, strong values and work you enjoy count for more than all the money in the world. Money is only a tool to help you get where you want to go. Use it wisely and reach your dreams. Good luck!”
If you would like a copy of this booklet for your college student, it is available free of charge online at: http://www.smartaboutmoney.org/40moneytips Information adapted from ScholarShop and National Endowment for Financial Education (NEFE), 40 Money Management Tips Every College Student Should Know.
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