7 Ways to Financially Prepare your College Children

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One of the most difficult tasks for students transitioning to college life outside of the classroom is learning to handle money. Even if your student is more self-sufficient than ever, they still turn to you for guidance in a variety of areas, including financial responsibility.

While growing up, 56 % of young adults* say their parents were their major source of financial knowledge. And 43% think they’ll be their most essential source of financial advice once they’re on their own.

Some parents may think about providing financial assistance to their children to help them get started. Others are concerned that giving money to their adult children may postpone their sense of independence. Here are some suggestions to think about as you figure out how to best assist your child in becoming financially self-sufficient.

What Is Financial Independence?

Adult children who are financially independent do not require financial assistance from their parents or guardians. This does not imply that a parent must fully break ties with their kid; they can still give financial assistance. This simply indicates that a youngster is capable of completely supporting their financial commitments without the assistance of their parents. While most parents hope that their kid would reach this stage in life sooner rather than later, most young individuals do not reach this milestone when they turn 18.

Ways to Financially Prepare Your College Children

1. Give Knowledge as a Gift

When it comes to finances, knowledge is a powerful tool. Teaching your child about the significance of budgeting and spending will assist them in learning to manage their money. A budget is similar to a spending plan in that it enables your child to keep track of his or her earnings and expenses. Setting priorities is also an important part of a budget. This entails classifying budget items as either necessary or non-essential.

Costs that are not negotiable are referred to as essential expenses. Because they must be paid, they are the most important budget item. Mortgage or rent payments, utilities, food, insurance, and student loan payments are all included. Things that are lovely to have but are not necessary are classified as non-essential — or discretionary — costs. They cover things like premium cable, dining out, and entertainment. If more money is required to pay necessary needs, these are expenses that can be reduced.

2. Stop Teaching your Child how to get by and start teaching them how to make Money

Don’t instil in them a fear of gaining wealth. Wealth may be utilised to make the world a better place. In our world, we need more benefactors and inventors. There are several critical issues to address and destinations to visit. There would be no advancement if everyone settled into a safe existence with a regular job. Remember that safety is an illusion, and that no amount of “work stability” will keep your children safe. They have the opportunity to learn from you right now, rather than having to learn the hard way by losing their job or going into tremendous debt.

3. Plan Beforehand

Make a strategy with your kid or daughter along these similar lines! It’s quite OK to collaborate with your child on a strategy to discontinue your financial assistance. You don’t want to inadvertently injure your child by allowing them to make decisions that aren’t necessarily in their best interests. Whether your child drops out of school to seek a new professional route or graduates from college, they must invest in their own financial well-being and try to be self-sufficient. While this does not imply that parents should abandon their adult children, it does imply that they must take responsibility for their own objectives and ambitions in order to become self-sufficient.

4. Encourage kids to utilise social media, but also educate them how to self-edit on the internet

In today’s world, personal branding is crucial for wealth creation. If you educate your children how to edit and curate what they say and how they say it, they will be well equipped for this. Remind them that their internet persona is permanent, and they must avoid making humiliating errors. Everyone should have a message for the world, and you may assist them in creating theirs. They may simply tell their friends about it now, but coworkers, clients, bosses, and investors will learn about it in the future. Instead of banning kids from using social media altogether, teach them how to control their public image.

5. Stress the Importance of Keeping a Good Credit Score

It’s possible that your college graduate is in debt. They should be aware of the need of making timely loan payments, regardless of how great or little the debt is. Your child’s credit rating may suffer as a result of repeated late payments. Credit card interest rates, as well as vehicle and home loan interest rates, may rise as a result. It’s critical to stress that late payments can add up over time.

6. Discuss Career Plans

Your youngster should use that hard-earned degree and knowledge to help launch a profession. Relocating to a region with greater work prospects is also a possibility, but only if the long-term relocating costs are justified. If your child does pick a lower-paying job, talk about his or her long-term professional goals.

Working part-time while paying dues might assist your child make up the gap if they aren’t earning much in their chosen industry. Encourage your youngster to work part-time. House-sitting, babysitting, dog-sitting, yard work, bartending, hostessing, and catering events are all options for extra cash.

7. Demonstrate how to take steps toward their Goals

Persistent, accumulative acts lead the way to wealth. There are even moments when mini-actions are required. Don’t tell your children that their ambitions are too lofty. Don’t inform them that the only way to do this is to win the lottery. This is absolutely not the case. Assist them in taking the initial steps by having complete trust in their biggest aspirations and telling them how to get started.