Don't Make Money Mistakes in College
College is a time to learn, and not just in the classroom. It is also a great place to learn money management skills. Undergrads are often breaking away from parental protection for the first time in their lives, and the road to independence can be rocky. Today.com has some great tips on how college students can avoid falling into common money problems.
What can students and their parents do to avoid financial pitfalls?
The first step is to talk, says Keith Bernhardt, vice president of college planning at Fidelity Investments. “I think that more could be done from a planning perspective, and having eyes wide open about what the total cost of college might be.”
Parents should also monitor what their kids are doing. Seaman recommends that parents have access to a child’s college bank or credit card account. “They can spot the financial pitfalls that kids are falling into,” she said. One option is a prepaid credit card where transaction notices flow to the parents. Another isadding the child to a parent’s credit card—setting a lower credit limit for the child.
It’s also important to gradually increase the amount of financial independence your child has, once he or she masters the basics. They need to learn to handle money, and it’s best to have them make small mistakes while they are in a relatively safe place.
For some students, that opportunity comes when they live off campus. Seaman’s daughter, Katharine Rowan, is a junior at the University of Wisconsin-Platteville, and living off campus.
“When we get the bill for electricity, utilities, whatever it is, we all split it four ways and then we pay it,” she said. “Groceries – I still have to work on that one.” But Rowan is much more financially savvy than some of her friends.
“I wanted a car, but I’m kind of glad I don’t have one here,” she said. “You have to buy a parking permit for about $200.”
What are some important money management strategies you’ve learned in college? For more information, please click on the link above.