Your teen has graduated high school and is off to college in the fall! You're probably thinking about the packing list, roommate assignments, and registering for courses. But don't forget to prepare your teen for managing their money when they leave the nest. We're with you with a few important tips to set your teen up for financial success through their college years and beyond!
Privacy
Yes, there should be some secrets that should not be shared with roommates and friends. We’re talking about financial things. Your teen should know that their personal finances are just that…..personal. Discourage them from sharing private information with anyone such as PINs, online banking passwords, social security numbers, account numbers, driver’s license number, and especially their debit card information and not letting anyone use their actual debit card. Be sure they know how to regularly review their accounts online and to contact us if they suspect anything doesn’t add up.
Budget
There's a lot to be prepared for when it comes to college. Help your teen navigate the transition from high school to college with a plan - help them set a budget now! Your teen is getting ready for a big change, and budgets can be a great tool to help them live within their means.
Things to help them consider when budgeting:
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Living expenses
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Groceries
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Utilities
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Gas
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Entertainment
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Clothes
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Car payment/car expenses
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Unexpected things that come up (see below)
By setting reasonable and attainable goals, your teen will build a positive relationship with finances and budgets!
Emergency Funds
This type of fund will ensure that when unexpected costs arrive, your teen will be prepared to handle them without derailing the rest of their finances. Brainstorm what emergencies could arise (unexpected class expenses, car repairs, weekend trips with friends) and how to budget for them. As an adult, it is recommended to have 2-6 months of expenses set aside. You and your teen can decide what that might look like for them.
Explain the Difference Between Wants and Needs
Have a serious discussion with your college student about the difference between wants and needs. Sometimes it can be difficult to accept that ordering pizza every night is not an actual need, especially as a young adult. But by setting expectations on what is and isn’t acceptable for “splurges”, your teen can learn to be financially responsible— learning when it is OK to say “yes” to something extra, and when it might be beneficial to say “no” instead. Everyone should have some money set aside to spend on hobbies and activities! The important lesson here is balancing wants and needs to live within their means.
First Credit Card
Starting college is often when young adults get their very first credit card. Typically for emergencies. Now is a great time to get your teen familiar with the pros and cons of credit cards and understanding features (like cash back or other rewards) and rates that work for their life. Go over the basics of credit scores and how making regular, on-time payments on their credit card helps those scores and keeps them financially fit. If your teen is ready for a credit card, WyHy offers some great credit card options.
Keep the Conversation Going
You’ve made it this far and are that much closer to helping your teen find financial success as a young adult - keep the conversation going. Goals and finances are always changing and growing as your teen does, so stay in touch with them about finances to be sure they are still on track and making progress.
WyHy is with you and your teen through every step of your financial journey!