By Monica Padineant, For the Reporter
Summer’s the season of transition, especially for families of recent high school graduates heading off to college. For 18 years, they’ve grown and learned together. Now, with new levels of independence looming, new feelings of anxiety can arise as well.
As a family-focused financial advisor, one of the biggest worries my clients talk about is money. By this point, there’s likely a plan in place to cover the costs, whether through savings plans, financial aid or part-time jobs. But reality is that many kids will be living on their own for the first time, and that comes with new financial responsibilities.
The good news is you can help your grads start financially smart.
Show Them the Money
Many teens may know that there’s money set aside for education, but fewer know how many expenses there actually are. Giving them an inside look at the costs of tuition, fees, housing and more can open their eyes to financial realities and maybe even strengthen a sense of responsibility to make the best use of the investment.
Help them build a budget early so they know both where the money’s coming from and where it’s going. If there’s a way to get them involved in the physical act of paying the bills on a regular basis, that’s one more way to get them to take it seriously.
Talk About Temptations
Eating out, shopping, entertainment and the ever-present credit card applications on college campuses are just some items that can tempt newly independent students to spend beyond their means. One way to reduce impulse buys is to talk about them in advance.
You may already be paying for an on-campus meal plan, for example, and your student needs to know that off-campus restaurants aren’t covered. That zero-interest credit card may sound great at first but, when the interest kicks in, things change. To head off student spending that can get out of control, take the time to talk about what’s reasonable and what responsibilities they have before they head out on their own.
Encourage Real World Experience
Part-time jobs, joining clubs and volunteering in the community are all great ways your student can enhance their college experience, and many offer opportunities to learn financial responsibilities as well.
A weekly paycheck can make a monthly budget less intimidating and build a sense of pride. Finding an organization with which to volunteer can help students gain a deeper sense of their values. And many clubs offer opportunities to get involved in their own financial operations, which can teach additional money management skills. This kind of real-world experience can enhance a college education with skills that’ll last a lifetime.
Don’t Be Afraid to Check In
Finally, while your student needs space and time to adjust to this new experience, you have a lot more experience when it comes to finances. Don’t be afraid to periodically check in on money matters. This may take the form of monthly family finance meetings to review spending and review budgets, or simply discussions when the kids come home for vacation.
Heading to college is an exciting time. It offers a wealth of opportunity and a whole new set of responsibilities. Money is one of them. Talking with your student about it can help them understand its importance. And that’s a lesson well learned.
Monica Padineant is a Kirkland resident, Certified Financial Planner and Director at Laird Norton Wealth Management. She can be reached at email@example.com.