Discussing Costs With Your College-Bound Teen

The first week of college is a time of excitement for recent high school graduates. They want to see and do everything without the ball and chain that is their parents. Doing everything is likely to cost money. So then, the first week of college is also about learning, learning how to budget. Making a good budget is one of the first discussions you should have with your college-bound high school student before they head off for school.

Financial literacy is often left up to parents. Some schools are making teaching kids about savings and credit while they are still in high school. However, not only is it up to most of us parents to do the teaching on this subject, it is up to us to reinforce good habits regarding money. Fill up their curriculum with financial intelligence before they graduate.

1. Get a Job

One of the best ways for young people to understand finances is for them to have a taste of the real world acquisition of money. Kids will experience receiving a paycheck, understanding banking and the beginning of budgeting and financial goals.

They may want to take a nice laptop to school with them rather than the still functioning, but not flashy, laptop they used during their senior year. Give the future college student the goal of earning enough money to buy that laptop. Have them calculate how much they will need to have earned by the end of the summer to pay for the laptop.

2. Good and Bad Credit

One thing that hasn’t changed since we were in college is that banks still want to hand credit cards to 18-year old kids. It’s a good idea for us parents in theory; something could go wrong, the kid needs money and we’re perhaps hundreds of miles away and unavailable to help immediately. It’s a great idea for the banks because of the amount of interest and fees they stand to make. Sometimes, it’s not so great for the kids who may get an early lesson in the effects of bad credit if they don’t pay the bill.

Parents should have a good conversation with kids regarding credit cards and spending before sending the kid off to college. Whether or not you think it is a good idea for a kid to have an “only in case of emergency” credit card, kids will eventually deal with the concept of unsecured credit from banks and the potential negative implications of mismanaged credit.

3. Loaned Out

One of us, parent or child, is going to be taking out a loan for a college education. Except for the very big or fast or wealthy kids among us, the cost of college may make loans a necessity. So then, it will be a necessity for our kids to understand the ins and outs of education loans, grants and other means of paying for college that doesn’t involve cash or credit. The best time to have the discussion would be during the filing of applications. Filling out financial aid forms may be a good place to begin what can be a difficult topic to discuss.

4. Generic Goods

We talk a lot about the most expensive items such as computers, cars, tuition and books when it comes to paying for a college education. However, the kids have to eat, sleep and dress well enough not to get kicked out of class. Discussing budgetary basics should be a part of the pre-game talk for kids going off to college. They may need tips on how to stretch dollars in a grocery store or how to bargain shop for items they need.

Hopefully, you have a good relationship with your kids and can discuss these things easily. That doesn’t guarantee that they are listening. A financial advisor will be available to listen to you and take on any questions regarding paying for a college education.

Click here to schedule a call with a BWC advisor today.

The information presented in this article is obtained from or based on sources believed to be reliable. BWC does not represent or warrant its accuracy or completeness and is not responsible for losses or damages arising out of errors, omissions or changes or from the use of information presented in this article. The article does not purport to contain all the information that an interested party may desire and, in fact, provides only a limited view. Information presented does not constitute an offer to sell or a solicitation of an offer to buy any security.

All investments involve risk, including loss of principal invested. Past Performance does not guarantee future performance. Individual client accounts and performance vary. BWC does not provide tax advice.

About Beirne Wealth Consulting Services, LLC – www.beirnewealth.com

Beirne Wealth Consulting Services, LLC (“BWC”) is a privately owned, SEC Registered Investment Advisor* with offices in Connecticut and Pennsylvania. BWC provides independent, fee-based investment management services and customized financial planning solutions. Our institutional business provides consulting expertise to defined benefit and defined contribution plans, endowments, foundations and non-profit organizations. Our private clients include high net-worth individuals and prominent families, many of whom bring complex wealth management challenges and multigenerational planning needs. For more information, please visit www.beirnewealth.com or give us a call today at 888-231-6372.

*Registration does not imply a level of skill or training.