5 Healthy Financial Habits You Should Teach Your Child.
College shouldn’t be a place to just go and study academic subjects alone.
It should also be the ideal opportunity for young people to start learning the set of financial skills they will require to cope in the adult world at a time when it’s still somewhat safe for them to make mistakes.
As a parent, you want to give your child space to become their own person, but at the same time, you want to give them the guidance they need to make responsible choices.
Below are 5 financial habits you should teach your child.
1. Basic Banking
If your child doesn’t already have a bank account, help them sign up for one. Ideally, they should choose a bank with a branch near the college.
Some banks even have on-campus branches, depending on the school. This gives them the opportunity to learn how to manage her money and make their own bill payments.
Budgeting is an important life skill that many people don’t learn until it’s too late. If you plan to give an allowance at college, try to give your child all of the money in one chunk, either at the beginning of the semester or the beginning of the month.
Make sure they know that this is all the money you plan on giving them and that they need to make it last. When the money’s gone, don’t bail them out.
Teach this essential lesson. If they didn’t do a good job at budgeting for essentials, offer money as a loan that needs to be paid back.
Many young adults need to work through college to cover their expenses. Even if your child doesn’t need to work, it’s a good idea to require them to get a job.
Not only will this give them experience that will help them get that post-college job, but it also helps to put money into perspective.
They can plan out each of their paychecks with a pay stub calculator, which will enhance their budgeting skills. When your student is actually earning the money, they can see how hard it can be to work for it.
4. Using Credit Responsibly
Building credit in college means having a decent credit score after graduation. By using credit wisely, your child will be able to easily get an apartment or buy a car.
Student credit cards typically offer low rates. Make sure that your student understands that credit cards shouldn’t be used to finance things they can’t afford.
They should be used sparingly for convenience, and the bill should be paid off each month.
Saving money is an important financial habit that few people start early enough. Even if your student can only save $10 a month, it’s a good idea to have them set that money aside.
It could be in regular savings account for them to use in case of emergency, or to finance a project they have.
A parent’s job is to help his or her child grow into a responsible adult.
During the college years, it’s a smart time to let your students experiment with financial responsibility while still being there when they need you.
That’s all on 5 Healthy Financial Habits You Should Teach Your Child.