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Financial advice for every college student

How financially savvy is your college aged child?  Are they prepared for the real world and ready to make real financial decisions on their own?  Building good financial habits during college is extremely important to long term financial success. Following are few ways to help your child become good at making financial decisions.
 
The logical first step: spending plan
Most college students are sheltered from the true cost of living outside the home.  They don’t really have a spending plan because they spend pretty much all they make.  This makes for a poor financial habit upon graduation.  Now is the time to develop better spending habits. Start by giving them more responsibility for expenses, even if you are subsidizing their funds.  They at least have to wisely spend the money they receive perhaps even coming up with a really simple budget.
 
Establish credit while in college
The college years are a great time to establish credit and to teach credit card responsibility. Most financial institutions offer a student or credit starter program that includes credit cards and other loans.  Getting started with responsible use of credit will help students establish a higher credit score by the time they graduate.  This can be really helpful when they move out on their own and look to buy homes and cars. 
 
Proper use of credit cards
As a student, don’t use a credit card for everyday expenses like entertainment or eating out.  The best use of a credit card during the college years is for expenses that are planned like books. Most importantly, make sure the balance is paid in full each month.  Using the card in this manner also helps avoid overspending and impulse buying.  Using your debit card or cash is a much preferred method of payment for everyday expenses, especially when younger.
 
Saving can be a habit for college students too
Saving is an important habit to develop during college.  There are really two forms of saving that should be introduced during college.  The first is saving for short term goals such money for holiday shopping or saving for a spring break trip.  The second is longer term which might include saving for a car or even a small amount of summer earnings invested for retirement.  The point is to make it a habit to save a portion of every paycheck so that a good financial habit is started very early on in life. This habit will be repaid many times over in their financial future.


Posted: 5/5/2014 with 0 comments

Categories: College, Kids and Money, Money Matters, Students



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