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Getting Your Student Ready for College

All your years of planning and saving have paid off! Your child is college-bound and will be leaving in the next few weeks to start the first chapter in his or her “almost” adult life.

Here are a few basic money management tips and tricks to help you teach your children how to handle their finances while they’re away at school:

  1. Learn to budget from the start. It’s important for your children to learn how to budget their money. Opening a savings account to save birthday or holiday money, allowances, or money earned through part-time jobs while in school is an excellent way to start! Next, learning how to budget for living expenses not included in tuition, room, and board – like textbooks, coffee at the on-campus coffee shop, transportation, and entertainment. Students should be encouraged to set a budget for their categories of spending and be sure to save for these things.
  1. Open a checking account. Teach your child how to manage a checking account by making it a habit. Help them open their own checking account. Deposit paychecks and gifts of money and withdraw for purchases like school supplies and a night out with roommates. Knowing how to keep track of money is necessary when dealing with personal finances, and managing a checking account is an important part. And, it’s easy to do with online and mobile banking.
  1. Use online and mobile banking. Let’s face it, your kids are probably not going to keep a check register or even balance their checking account. But, they can view all their transactions, transfer money, deposit checks, set up account alerts, and stay on top of their finances using online and mobile banking services. They’re already on their phones 24/7, so it makes perfect sense to teach them how to do their banking by phone.
  1. Avoid ATM fees. Using their debit card and asking for cash back is a free way to get cash without having to pay additional fees. If your child is planning to attend college outside of Rochester, they will be charged to use non-ESL ATMs. Instead of paying this fee, show them how to use their debit card to get cash. For example, if they’re at the grocery store and their total comes to $20, they just ask the cashier to charge $40 to their card and they will receive the $20 difference in cash. To do this, they just choose the debit option and enter their PIN.
  1. Be careful with credit cards. Make sure your children know that credit cards don’t supply endless amounts of money. Instead, people who overuse credit cards are actually racking up expensive debt they’ll have to pay back later. Start your student off with debit cards or prepaid, reloadable cards where there’s a prepaid limit on how much can be spent. Also, teach them to use credit cards as a backup for cash or for emergencies only. This will help ensure they don’t spend more on credit cards than they can afford.

    A secured credit card is another excellent way to teach your child how to use and manage a credit card. It works just like a regular credit card but the difference is the credit amount is secured with money deposited in a savings account. And, it can help your child build credit so that down the road they can graduate to a traditional credit card.
  1. Look for deals. College students don’t always think about looking for money saving tools while shopping (who cares when mom and dad are paying), so be sure to make this a habit. Look around for both in-store and online sales, and compare prices of items online versus in-store. Don’t be afraid to use coupons, and encourage your children to use saving services online. Also, have them sign up for savings cards at stores where they often shop, including drug stores and grocery stores. These little saving tricks will become habits for the future.

Simple acts such as these will help make sure that when your children are off at school and handling finances on their own, they will be prepared and will understand just what they have to do.