Back to School Is a Good Time to Talk to Your College Freshman about Money

Gloria Nye  |  10/14/2008 9:27:24 PM

College Costs

Sure, you may have already talked to your soon-to-be college freshman 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 on-line booklet, “40 Money Management Tips Every College Freshman Should Know,” which should be required reading for anyone going off to college this fall.  In less than 50 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, discussing 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 8 ways they suggest that 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 20-30 day grace period.  You can shop on-line for the best credit card deal at the Bank Rate Web site.
  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 soon-to-be college freshman, it is available free of charge on-line.

-Information adapted from ScholarShop and National Endowmaent for Financial Education (NEFE), 40 Money Management Tips Every College Freshman Should Know.

by Gloria Nye, Extension Associate, LSU AgCenter

06/26/08

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