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The Freshman 5: Financial wisdom for the college bound

College freshman will be heading to school very soon and most families are already preparing them for the day. When thinking about what your child needs, don’t forget financial wisdom.  Not only is important to obtain a good education but you also want your child to leave college in a sound financial condition as well.
What’s the starting point for college financial wisdom?
Start with a simple budget that includes spending money as part of the budget allocations.  Have your child setup an automatic monthly transfer into their checking account so that they don’t have more money available than their allotted budget.  And, ask them to have a think before spend limit of $50.  This means any expense over $50 they will wait 48 hours before making the purchase.
How can students avoid fees or other financial costs?
Get a student checking account that offers ways for to avoid fees, especially look for an institution that offers technology like text alerts, a mobile app and other tools to help avoid NSF fees and having late payments fees on loans and credit cards.  These tools can be invaluable in keeping up to date with financial matters during a busy college semester.
What about a credit card, is it a good idea?
Yes it is as long as it comes with limitations.  Building good credit in college will be very helpful upon graduation. The biggest issue is making sure to avoid racking up thousands of dollars in credit card debt.  Opt for a small limit of $1,000 to $2,000 and only use it for one time expenses like books or other items that can be paid off monthly. Make sure it is never used for everyday expenses.
Are there any other concerns to address?
One that many people don’t think about is fraud and theft. College campuses can be very open places so keeping financial information in a secure place is very important. Often times these issues are a result of opportunity rather than intent.  They won’t know everyone who comes in and out of their room or might not even think to always lock their door or secure their backpack.  Just a little preventive efforts and awareness is all that is really needed to address this issue.

Posted: 8/11/2014 with 0 comments

Categories: College, Money Matters, Students

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