An Omaha Insurance Agent Says This Is A Money Conversation You Should Have With Your College-Aged Student
OMAHA, Neb.-Students pack their bags and prepare to go home for the summer. For many, this past year was the first time they managed their own laundry, lessons and curfew – and their own bank accounts – without their parents.
It continues as a period of transition for many young adults and their parents. They will need help from you as they continue to meet their new financial responsibilities and learn to enjoy a life of good financial management.
Here are some tips from Manley to help you talk to your college-aged students before they head back to campus next fall:
Help your student work on a budget. Budget goals and priorities change over time. If your child had a part-time job while in high school, building up savings was probably the priority. A student’s top priority probably isn’t saving money, but rather figuring out how to make the money saved last through the semester or into the summer. Parents can help a student itemize and prioritize all the things the student will need to buy, such as clothes and sundries, textbooks, car or cellphone expenses.
Anticipate mistakes and let your student correct them. No matter how good the student’s budget is, mistakes will happen. Some of them are minor, like when a student simply forgets to budget for working fewer hours in a part-time job during an exam week or when they have to take an unpaid sick day. If this happens, a little help from mom or dad may be appropriate. But sometimes the mistakes are major, the result of overspending and under-earnings, and the student runs out of money before the end of the first semester. In this case, however difficult, do not bail out your student. Help him find a way to solve the problem. If the student lives on campus and you’ve paid for a meal plan, they’re not going to starve. He may have to find a way to work a few extra hours or make sure to earn a few dollars during summer vacation.
SPEAK. Specifically, discussions of credit cards and the number of credit card companies are driving students to open accounts. Show your student how long it will take to pay off even a small debt (here’s a handy calculator). Even a small balance of $3,000 can take up to 10 years to be paid off, during which time the borrower would have paid over $2,200 in interest alone. Student loans, auto loans, and possibly mortgages are often considered good debt. But credit cards in the hands of inexperienced users can be disastrous.
Let the student know that you will be checking. From time to time, check your student’s bank balance. Review expenses and deposits and make sure she’s on track to make money over the summer. As time passes and the student gets better at managing money, you can let them manage it without your help.
College is such an exciting time and a time when young adults not only learn academic lessons, but also life lessons. They still need you to show them how to avoid making financial mistakes and how to fix the mistakes they make along the way.
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About the Author: Through hard work, dedication, and meeting customer needs with passion and professionalism, Manley and his small team at his Farmers Insurance agency in Omaha, Nebraska have made largest Farmers Insurance agency in the state. His agency is also the second largest for the entire Farmers Insurance region. Manley’s service to the community includes support from Siena/Francis House, Restoration Exchange, Homeward Bound Animal Rescue, Ronald McDonald House and Stephen Center.
