Service Members send their sons and daughters off every year to college, but each year there is a growing awareness that more planning could have eased some of their financial worries. College is an expensive endeavor, but one that with some pre planning and a strategy, does not need to be a crisis financially. A young person can build a positive financial future starting with their college experience. One of the first things is for a young person to learn how to manage their finances. Part of that process is learning to make and keep to a budget.
When a student finishes college they will have an average of close to twenty thousand dollars in credit card debt and financial aid loans to cope with. Without a budget of some kind many students start their young careers on the wrong foot. “Budget and Credit are lessons that are very important,” said June Walbert. Ms. Walbert is a Financial Planner with USAA Planning and Financial Services. Here are some of the tips that Ms. Walbert works with students and parents to examine in creating a healthy credit and financial picture.
Consider a checking account with your parents, with accompanying online access. That way both the student and the parent can track the money on a daily and weekly basis. This ability to track and follow where the money is going on a real time basis can help both parents and students keep an eye on the spending going on. Use Pre-paid spending cards whenever possible, they offer freedom but with limits, they cannot be over spent very easily.
Credit cards are fine but they should be avoided where possible, use pre paid and refillable cards instead. If a credit card is the method you are going to be using, set a low limit, such as perhaps $500 dollars. This prevents a huge bill that no one anticipated or can afford. Keep cards in a safe place; don’t carry them all the time if it can be avoided. At least at first have at least one parent on your account to help you build a budget, and for some accountability?
Take the time to sit down with one or both of your parents and write down how you each feel money should be spent. This is a positive exercise at any time, but as you started to head away to school, it is important to know and to track such budgeting choices. It can be eye opening for both student and parent to sit down and put into writing budget choices. Make the budget workable, and make sure that it has at least a little fun money budgeted in.