The summer days are dwindling, which can mean only one thing: It’s time to go back to school. While you’ve been helping them make smart decisions their entire life, now’s the time to prepare them for a future of independence.
Your child will have the freedom to decide how and what they’re spending their money on likely for the first time in their lives. Introducing basic banking tools like debit cards, credit cards and savings accounts will help them gain experience and confidence to manage their finances responsibly.
And for parents who aren’t ready to release the reins completely, these tools enable you to provide financial support and monitor transactions, giving your child the opportunity to spend wisely with a little “parental control.”
Budgeting Tools
Budgeting apps help your child stay on top of their spending. The Balance conducted a survey to discover the best budgeting apps for the year. Each has unique qualities, but all of them will keep your child’s spending in check. Here are the standouts:
- Mint
Brought to you by the company that makes QuickBooks and TurboTax, Mint automatically categorizes your transactions by linking to your financial accounts. It also sends alerts when you go over budget.
- PocketGuard
As opposed to other apps that track against a set budget, PocketGuard links to your financial accounts to monitor your spending.
- Wally
Is studying abroad in the cards? This app supports all foreign currencies for if and when your college student travels the world.
Keeping Track of Funds
Online banking makes it easy to check your balance and spending history. Mobile apps through your bank grant the power to access this information from anywhere.
While having cash in your wallet is smart, debit and credit cards allow you to track every transaction on your online bank account so you know you’re sticking to your budget with every purchase you make.
- Debit Card
It may surprise you that many high school students already use a debit card, but it shouldn’t be a surprise that 80% of college students use a debit card.
Having a debit card is a basic necessity. It allows for instant and convenient purchases from anywhere and fiscally prepares your child before it’s time to open a credit card.
- Credit Card
Handing over a credit card to a college student may seem senseless. However, not building a strong credit history at a young age may impact qualifying for future credit cards, loans, and housing.
According to a US News survey, 40% of college students were not familiar with credit cards before getting one. So take the time to sit down and discuss the importance and responsibility of owning one.
- Savings Account
Saving during college may seem like an impossible task, but encouraging your college student to open a savings account is solid advice for careful money management.
Savings accounts provide easy access to money for future needs. A savings account comes in handy for urgent car repairs or other emergencies, especially if your child isn’t ready for a credit card.
Your child can also set up their direct deposits to split into checking and savings accounts, which means they’ll automatically be saving some of each paycheck they receive.
Ways to Transfer Money
Transferring money between bank accounts —whether to savings or checking, or paying bills—is useful and virtually instantaneous.
- Automatic Payments
For families who’d rather have separate accounts, you can schedule electronic payments to deposit money directly into your child’s checking account. This is perfect if you’ve agreed to give an allowance because you don’t have to send money manually.
You can also send money on an “as-needed basis” with automatic payments. It gives your child immediate access to money and still allows you to see their balance and transaction history.
Parental Oversight
Sending a child off to college, whether they’re the first or the last, is difficult for many reasons. It’s natural to worry about them being financially independent. These options let them make smart financial decisions and let you stay involved:
- ESL Card Control℠
With the ESL Card Control App, you can control when, where and how often the debit card is used. You can turn it off and back on if it’s ever misplaced or lost (helpful when on a college campus). The app also allows you to receive immediate transaction alerts so that you can have a watchful eye on your child’s purchases.
- Joint Bank Account
Having a joint bank account with your child grants both of you access to the money in the account. It allows for easy monitoring of their daily spending transactions. You can also sign up for alerts for large purchases and when the balance falls below a certain amount.
Teachable Moments
Monitoring your child’s spending is always advisable, regardless of how much financial support you’ll be providing to them while they’re in college. Keeping a close watch offers opportunities to help them out when they need it, too. Remember, everyone makes mistakes, so use them as teachable moments.
