Heading to College? Take Along the Basics of Personal Money Management
|August 7, 2014||Posted by M. P. under Education, News||
For many families, the month of August is all about shopping for and packing with their college-bound offspring, many of whom are living away from home for the first time. Parents and students are likely also discussing topics related to this exciting transition – living with roommates, choosing a major, time management, student-parent communication boundaries, and staying healthy. In all of this activity, the issue of personal financial management may be overlooked; or is assumed to be understood by the student, even though knowing what a budget is and living by one are two very different things. Some level of skill around money management is a critical aspect of living independently and should accompany every incoming freshman.
The National Foundation for Credit Counseling (NFCC), the country’s largest financial counseling nonprofit organization, released a checklist that covers the basic knowledge a young person should have in order to develop good fiscal habits. Some highlights:
- Before they leave for college, plan and document a realistic monthly budget with your child. They should be responsible for tracking their own spending (there are apps for that!) as well as recording or monitoring all bank (including prepaid debit card) transactions.
- Explain the real-life impacts of accruing credit card debt, especially on top of any student loan debt, from paying interest on a monthly basis when charges are not paid off to a poor credit report following them long after graduation.
- Discuss the risk of identity theft and its fiscal implications, particularly related to information posted on social media, sharing passwords, and security issues with the use of public computers or unsecured Wi-Fi for financial transactions.
The Personal Finance 101 checklist and other resources are available at the NFCC’s website.