Money Matters Blog

Whether you’ve had children who have already headed off to college or this is your first child to take that step, these financial tips are a great refresher for everyone. College students are notorious for living off of very little money, but there are ways to change that. Going into college with a financial plan will help your child avoid worrying about money while in school and can lower the amount of debt he or she might have in the future.  

Talk About a Plan 

Before your child moves out and has control of their finances, they should have some sort of a plan ready. This might be as simple creating a list of part-time jobs they could apply for, or it could be a detailed plan including monthly budgets. Whatever works best for your family is the smartest option, but even a simple plan is better than no plan at all. Your child will go into school feeling much more prepared to handle money if you talk about it beforehand. 

Create an Emergency Fund 

You never know when an unexpected expense will arise – car repair or medical bills, for example – so having a backup plan is important. Remind your child how important it is to have an emergency fund, and if they don’t have one started, create a plan to start one. Even a small reserve is better than none at all. Most importantly, make sure your child understands when it is and is not appropriate to tap into their emergency fund.

Be Careful With Credit Cards 

Credit cards aren’t bad – they can help you build a good credit score if they’re used responsibly. Unfortunately, many mistakes are made when it comes to credit cards, especially by young adults who do not necessarily understand the long-term impact of their decisions. Make sure your child knows to limit the number of credit card accounts they open and to always pay in full each month. Better yet, open a joint card before they leave home so you can help monitor their spending and payments. Using a credit card wisely can help set your child up for success by building a strong credit score early on.

Know the Importance of Budgeting and Saving 

Not only will a budget and savings account help your child keep their spending in check, but it will teach them valuable lessons about self-control and patience. There are plenty of online resources out there that can help your son or daughter track their income and spending, and opening a savings account with even a small automatic monthly deposit will help them prepare for their future. As badly as they might want to spend everything they earn, help them understand why investing in their future is so worthwhile. 

Leaving for college is a big and exciting step in your child’s life. Helping them to prepare financially will benefit them and also give you peace of mind. We hope both you and your children will benefit from being reminded of these simple, yet effective financial tips. If you have any questions about our banking services, feel free to contact a Farmers & Merchants Bank & Trust Personal Banker– we’re happy to help!