Empowering Youth: Teaching College Kids About Money
College can be a financially dangerous phase for your child because they are out of your house and totally on their own. Here’s how you can prepare your young adult for the endless financial temptations they will face.
Money dominates many adult conversations yet we hardly talk about finances with our kids. So if money talk is taboo in your family, now is the time to break the silence and make a conscious decision to be open. Talk to your young adult about financial challenges you may be facing. Let them know that money problems may come and you are there to help when they do. Note: Help does not mean “fix the problem by paying the bill or wiring money”. Help means talking them through the problem-solving process.
Teach your young adult to delay impulse – especially if it is the impulse to buy. Train them to stop and think before any purchase that costs more than $25. A college student may be an adult by number but they don’t have enough life experience to manage self-control without your gentle guidance. Remember, they are battling all kinds of whims on a daily basis and frivolous spending is the least of the challenges on your child’s mind.
Since your young adult is away from home, it is important for him/her to become familiar with contracts. Don’t wait until they have signed their life away and it’s too late. Make sure they understand what a contract is and is not, the types of contracts they will likely encounter, and how to evaluate a contract’s character. Teach them to never sign anything without first considering other options for the purchase, researching the contractor, carefully reading the terms and fine print of the agreement, and consulting a wise third party.
Teach your young adult how to set and stick to a budget so their expenses don’t outpace their income. Let’s face it; in this day and time their financial history may be more important than their actual finances. Make sure to stress the value of financial integrity. Be certain he or she understands how credit reports work and specifically why having too many credit cards, late bill payments, over the limit fees, a lot of account inquiries, and charge-offs will affect more than future purchases. It will also impact their ability to get a J-O-B.