College Finances - What To Teach Your Kids About Money
Making your children financially literate should be one of your main concerns even before they enter college. Having your kids become aware of money matters, how to handle their cash and how to save up, even on their allowances may save you the headaches that come with college financing.
When your kids are able to develop money smarts early on, it would not be difficult for you to introduce the subject of a spending plan when they enter the university. Spending their cash following a budget would be a critical part of your child’s overall education as you know how much a college education costs. Aside from that, your child would most likely find himself living independently and would be subject to a lot of new experiences that will involve money; credit card companies would no doubt be anticipating the new school year.
Here are some of the money management values you should start to instill in your children as early as possible.
1. Getting by on a limited allowance. Once your child starts asking for money for school, you had better teach them the value of being stringent in spending. You could start by giving them a very little amount everyday. Then you could gradually introduce the concept of giving a weekly allowance so they start learning how to plan their allowance. While most parents would find it hard to say no when their kids run short of cash before Friday, just imagine how difficult it would be financially if the child gets used to their parents bailing them out every time.
2. Buying smartly. Teach your kids how to spend their money wisely by being a living example. Have them accompany you to the supermarket and teach them how to compare prices of commodities but still get the same quality and quantity.
3. Teach them the ins and outs of banking. Sooner or later, your child will have to learn how to put their money in a bank. It is never too early to teach your child the ways of banking. You can start by putting up a savings account, and then an ATM account or a debit card. Try not to do the balancing of their accounts for them, you can guide them but it would be best to let them learn to do it on their own too.
4. Saving up for a big purchase. Your kids, no matter how old they are, will have something that they would want to buy. Younger kids may want to buy the newest action figure; a teenager would probably want a car. You can teach them the difficulty of saving up enough cash for their goals and this would no doubt introduce them to the value of spending less on the not so important purchases.
5. Learning how to borrow and pay up debts. The whole world revolves on credit and the earlier your child learns about the intricacies of borrowing, the better equipped they would be later on in their lives. You can start by letting them borrow from you and then having them pay you up on an exact date with a tiny bit of interest when they are older.
See: College student card debt
Tags: student credit cards