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College Cash Dos + Don’ts
With parents watching over them, most children’s first financial missteps are fairly minor. Blowing a week’s worth of allowance money on candy certainly pales in comparison to the monetary muddle that can develop in college. According to student loan provider Nellie Mae, the average balance on a college student’s credit card is nearly $2,200.
So what happens between home and the dorm? A little word called freedom. “Oftentimes kids get caught up in the moment in college and they don’t realize that they’re spending money, or that it adds up,” says Nathan Dungan, founder and president of Share Save Spend®. Here’s a list of the dos and don’ts to prepare your high school senior for financial success:
Do: Set good money management examples at home, include kids in the discussion of family finances, let them make some purchasing decisions and emphasize how saving can lead to greater goals.
Do: Encourage your child to monitor cash flow and create a budget that will help him get through the year, complete with necessities, nice-to-haves and a rainy-day fund.
Don’t: Wait until college to teach your kids about tools like online banking that can help them better manage limited funds.
Do: Get your teen a credit card, and teach her how to use it. It is better this education comes early and at home. Discuss APR and credit scores, and how carrying a balance and/or paying bills late can hurt both.
Don’t: Use scare tactics. You don’t want your children to be afraid to come to you with problems.
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