As summer comes to an end, back-to-school season begins! For many, this time of year also means saying goodbye as students head off to college for the first time. While bittersweet for parents, college is also an incredibly exciting part of your kids’ lives! It’s their chance to forge their own path, set up their future, and get a taste of independence – including financial independence. With your children taking their first steps into adulthood, you’ll want to have their backs and give them the tools they need to navigate the world of money management. Lucky for you, today’s blog is all about the essentials your college students will need to start gaining financial independence and set themselves up for success once graduation day comes!

Open a Bank Account

Every bird has to leave its nest – or in this case, every bird has to leave their parent’s bank account. The first step to giving your new college student financial independence is to set up their very own checking and savings accounts. To keep things simple, you could consider opening an account for them at your own trusted bank. If you plan to send your child money or have them help with payments, then you could also consider linking their new bank account to your online banking for easy transfers. Just be sure that when giving your child the power of a bank account, you also talk to them about any associated fees and balance requirements. This way they’ll be well-prepared for the responsibility of maintaining an account on their own.

Prepare a Budget

Ah, budgeting. It’s an incredibly important – though sometimes overlooked – part of becoming an adult. With college comes textbooks, meals, and even sometimes rent. Not to mention the cost of going to events or going out with friends! Helping your child create strong budgeting skills is great not only for balancing all of these expenses but also for balancing expenses in the future. The simplest way to create a budget is for your child to write down the amount of money they have, how much they typically spend, and how much income they’ll receive month-to-month. This will help them differentiate how much they need to cover the non-negotiables – like the aforementioned meals and rent – and how much is left over each month for personal spending or saving.

Keep Track of Spending

Once the budget is set, then the tracking begins. It’s good to teach your college students how to regularly keep track of what they’re spending money on and how much. This way it’ll be easier for them to spot opportunities where they can cut back on unnecessary costs and make room for more savings. After all, what’s one less streaming service or DoorDash delivery? Plus, there are plenty of ways to leverage technology to help keep track of spending. For example, many financial institutions offer mobile apps and online banking so your child can pay bills, keep track of transactions, and transfer money whether they’re on campus or off.

Practice Saving

Speaking of saving, it’s never too early to start developing good saving habits. This is especially true for college kids since having a strong understanding of how to save money can come in handy post-graduation. For example, graduates will want to start saving for retirement once they establish their careers or start saving for a house to start putting roots down. Of course, saving doesn’t always have to be about long-term goals. Saving is just as useful in the short term or for simply maintaining an emergency fund in case things go wrong. No matter how much money is put away each month or for what, the important thing is that your child starts saving to build up that skill. Practice makes perfect, right?  

Build Credit

While building credit is important for your child’s financial future, it can also be tricky knowing where to start. The common route is to equip your college student with their own credit card. Before this, however, take the time to ensure that your child has a full understanding of the responsibility that comes with a credit card, such as credit limits, fees, maintaining balances, and interest charges. The last thing you want is for them to run up their credit card balance and wind up with payments that’ll take years to pay off. Another option is to make them an authorized user on your credit card. This way they can start learning how to build up credit under your oversight until they’re ready to venture out with a card of their own. Lastly, you can emphasize the importance of paying bills on time and paying off a credit card each month to help maintain a healthy credit score. This will come in handy after college if your child decides to get a loan for something such as a car or mortgage.

Understand Debt

Debt and finances tend to go hand-in-hand. Debt isn’t always something to avoid, however. For instance, there are student loans to help finance higher education or small business loans to help post-grads start the company they’ve been working on. The important thing is that you teach your child when to borrow and how to handle debt responsibly as you help them spread their financial wings. Plus, it’s good to discuss the different methods for paying off debt – such as the snowball or avalanche method. The more interest-bearing loans college students can pay off early on, the less they have to worry about once they take on a 9-to-5 and higher living expenses.

Take Advantage of Student Opportunities

As college students venture out on their own financially, don’t forget about all the opportunities available to help them along the way! For example, there are plenty of scholarships waiting to help cover part of – or even all – college costs. The best part is that your student won’t even need to pay these back like he or she would with student loans! They just need to keep an eye out for these opportunities and stay on top of application deadlines each semester or school year.

Additionally, there are plenty of businesses willing to help college students out by offering student discounts. Are they interested in seeing a movie with their roommates on a Friday night? Check to see if the local movie theater offers a discount! Want a good deal on plane tickets home for the holidays? Airlines might also have student discounts to offer. Not to mention all the discounted subscription services and student coupons that are available for college students to use!

And if your college student needs a boost in income each month, encourage them to look for a part-time job. Plenty of college campuses offer part-time gigs with flexible schedules to accommodate class loads as do some of the businesses surrounding the campus. If a part-time job and schoolwork prove to be too much, there’s always the possibility of working a summer job in between semesters so your student can save up some money for the upcoming school year. 

Summary

College is more than just gaining knowledge and career skills. It’s also about gaining life skills as students explore independence and adulthood for the first time. Included in those life skills is strong money management. By teaching your college students some of the practices we’ve discussed – from banking to budgeting to finding discounts – you can rest assured knowing that they have the financial know-how needed to make smart decisions now and into the future.