College is a time for growth for young adults. College is also a time for parents to learn to focus on themselves and probably worry about their college bound children more than they ever have before. One of the best things that parents can do for their children is talk to them about their adventures in college and what they expect open and honestly. As parents begin preparing their children for their college adventures, parents should also talk to them about the financial decisions they will have to make.
Many parents don’t talk to their children about their upcoming financial adventures. This is one of the reasons that so many college graduates start their career with more debt than they thought they would have. As these graduates enter their adult life, they are soon overwhelmed with the amount of money they have to spend to achieve the things they want. In order to avoid those situations, parents should talk honestly about the financial decisions they will have to face and the impact on their lives these financial decisions will have.
The Great Mistakes
College is exciting for most students. It’s often the first time young adults have lived alone and away from their family. These young adults will make stupid mistakes. Those mistakes don’t have to be financial mistakes though.
Student Loan Money Spent Wrong
Student loan money is money that should be used for tuition, books, room and board and other expenses that come along with getting an education. Millions of students don’t use this logic when it comes to their student loan disbursements though. There are some students that use their money to party, shop for clothing and electronics instead of what it’s actually for. This may cause a student to apply for more loans, incur more debt and stay in a vicious cycle of debt.
Parents- Talk to college bound students about their student loans and what they are for.
Credit Cards Are Not Free
It seems that every credit card company in the country thinks it’s a good idea to send college students credit card applications with large limits. College students think they will only have to pay what they charge and are eager to assert their independence by sliding their new plastic card everywhere and for anything. This is a HUGE mistake because the interest rates on these cards are often huge and the balance accumulates. Students that don’t have a job will have a hard time paying the monthly payments and can quickly get into debt that will be hard to pay off later.
Parents- Teach college bound students about credit cards, how to manage them and what real credit card debt is.
Budgets are for Old People
Ask a college student what a budget is and most will laugh hysterically. Many college students don’t know what a budget is or why they need to have one in place before going to college. Millions of students go to college with the idea that their parents and family are obligated to support their lifestyle and pay for their college expenses. While that may be a reality for some, it’s not what happens for most. There are many college students that don’t know how they will finance their life while in college for the first 2 years because they don’t realize that they will have expenses not covered by their tuition.
Parents- Parents should talk to their college bound student about their expectations and responsibilities while in college. It would be nice for every parent to have a money tree they can use to support their child while in college but that is something that’s not a reality to most. It’s important for parents to talk to their children about maintaining their expenses and what they have to do for themselves.
College is an exciting time for young adults. It can also be the time in life that the most debt is accrued. Parents should talk to their children about college life and expectations to avoid the great college mistakes.