FINANCIAL FOUCUS: Financial Tips for First-Time College Students
Sending your child to college is an exciting milestone filled with new experiences, friendships and opportunities for them to grow. For many families, it’s also the first time your student will be managing their own money independently.
The good news is that helping your child develop smart money habits doesn’t have to be overwhelming. With a few simple strategies, you can guide them to take control of their finances and avoid common pitfalls that trip up many college students.
Start with a budget. Creating a budget might sound boring, but it’s instrumental in helping your student take control of their finances. Many people use the 50/30/20 rule, which calls for putting 50% of income toward needs, 30% toward wants and 20% toward savings and other financial goals. So, if your child has $1,000 per month from financial aid, work or family support, they’d spend $500 on essentials like textbooks and food, $300 on fun activities and $200 on savings or paying down debt.
Encourage them to track their spending and subtract anything they pay out from their total monthly funds. This helps them know exactly how much money they have at any given time. There are plenty of free apps to help monitor expenses, or they can simply use a notebook to write down what they spend each day.
