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Have you “had the talk” with your college freshmen?

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Malik’s bags are all packed and he is ready for his return trip back to Bowie State University to start his Sophomore year. While he was home we had a chance to talk about a lot of things including his father’s cancer treatments and how to remain safe on campus.

This summer he also worked at Amazon and was able to make and save a few dollars for those “extradentials” so it was very important that we discussed his finances.  I recently read this article by Michelle Singletary which helps parents “have the talk” with their college freshmen. college students and finances

A financial suitcase for freshmen

By Michelle Singletary, Columbian business columnist

 

In a week or two, thousands of young adults will be heading to college for the first time and they’ll be faced with a lot of financial choices.  I wonder how prepared they will be.  It’s not enough to hope they will be ready to handle their money. As the good book says, “faith without works is dead.” Good money managers aren’t born; they’re trained.

So, as your college freshman is packing up, there’s one piece of luggage that needs to have all the right stuff: the financial suitcase. Here’s what should be inside:

college student and money

The right debit card. Before heading off to school, make sure your child has a debit card that will work well at his or her college location. That might mean opening an account with a different bank or credit union that has ATMs on or near campus to avoid an out-of-network fee. Double-check that you can easily and quickly transfer money into the account without incurring fees. For this reason, you may also want to get an account at the same financial institution.

Mobile bank alerts. If your freshman hasn’t done this already, he or she should set up alerts connected to the debit card. Alerts can be customized to report deposits, withdrawals and bill-due dates. Cardholders can also be notified when the account balance is getting low, which in turn will help avoid overdraft charges and other fees. Just be mindful of alerts received as text messages, which may incur fees from a mobile provider.

Box of envelopes: Budgeting may not be easy at first. If you know your child is challenged in this department, try the envelope money-management system. Envelopes should be labeled the following way for the four major spending categories: eating out, clothes, entertainment and transportation. Every week, two weeks or month, depending on how your child receives income or spending money, put budgeted cash for each category into the envelopes. When the money is gone from one, there’s no more spending on that category.

Commitment to save and not just spend. Yes, even students on a tight budget should save. If your student is getting a stipend or spending money from you or a job, encourage him or her to start the habit of saving something — anything — from the funds they receive not allocated for tuition, room, board and books. Suggest a “Life Happens” fund, which is different from an emergency fund. Money in this account can be used for pizza, parties, clothes, spring-break trips, concerts, etc. But when the money is taken out, your student should have a plan to replenish it.

Here are some things that students should not take to college:

no credit cards

Credit card: I know you’ve heard that it’s important for your child to establish credit. But it’s not time for that yet. As your student gets closer to graduation and needs to build credit to get an apartment or car loan, he or she can open a credit card account. But for now, as a freshman, consider credit an unnecessary luxury. Besides, debit cards with either the MasterCard or Visa logo can be used for almost any purchase. My daughter is a junior in college and she hasn’t had a need for a credit card.

Expectation to spend excess student-loan money: Talk to your child about not accepting a student-loan refund, which is money in excess of the cost of attendance. If there is money left over, he or she may get a refund check. This is not free money. It’s a loan with interest that must be paid back.

Entitlement mentality: Leave at home the attitude of having to experience everything. Going on that spring-break trip may not be feasible, especially if your child has student loans.

As your freshman is going over the checklist of things for college, make sure his or her financial suitcase is stuffed with tools and strategies that will help to avoid any money missteps.  

Chime in: Did you have “the financial talk” with your college student?



6 Comments

  • Iedda says:

    Hi! Thank you for sharing this. I felt compelled to share as many in our community seem to overlook this important topic. If we are not talking to our children thay will unfortunately leave home and here the wrong advice from their peers and other people who could care less about their financial status. What you have shared will ensure that young adults are ready to become financially fit!
    Thanks again for sharing.

    #BLMGirls

    • DeDivahDeals says:

      Ledda, thank you because as soon as I read it, I knew it was something that needed to be shared. My son will be a sophomore but last year thought the excess money from our loan was his to spend freely—NOT. Thank you for taking time to comment and thank you for sharing!

  • Jennie says:

    Truly great tips! I have always talked to my sons about the importance of being fiscally responsible and am surprised at how many parents do not discuss this subject. Best of luck to your son and husband.

    Stop by and join me for Fabulous Friday!

    • DeDivahDeals says:

      Jennie, thank you very much, but as parents we try to help and guide our kids, but oftentimes forget that they have to learn the “grown up” stuff too! Thank you for stopping by to comment and share. Have a wonderful weekend.

  • This is really an important post! It’s something that often gets over looked in the parenting arena, but it was one of the most important things we can teach our children!

    • DeDivahDeals says:

      Rena, yes, not only are we doing ourselves a disservice by not at least having this conversation with our children, we are setting them up for possible financial disasters later on in life. Thank you for stopping by and commenting.

I love reading your comments!

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