Sending your kid off to college can be an exciting yet a bittersweet experience. There are tons of lessons that you want your child to heed when you are finally sending them off. However, one thing that every parent should teach their child is the importance of saving money during college.
This can be challenging, especially given that more and more students are dependant on loans and grants these days. Financial nightmares abound for college students. So in an effort to minimize your child’s financial suffering during college, educate them on financial management.
Here are 10 useful financial tips you can give your child to make sure they live a financially independent life in college.
1. Ask them to look out for paid internship opportunities
If your college-going child is on a semester break, ask them to look out for paid internships. For the duration of the gap between when classes are off to when they resume after the break, college students can gain valuable work experience and hard-earned cash.
Many companies offer internship opportunities especially during the semester breaks. By going this route, your child will be able to pay off their student loan or debt and also manage, on their own, their other day-to-day expenses.
However, paid internships opportunities can be few and far between and spots can fill up quickly. The key thing is to leverage certain job platforms to your advantage and identify opportunities as they arise.
For example, if you are enrolled in an Online General MBA Program, you can take various internship opportunities in HR or Finance at reputed organization if you use LinkedIn smartly and connect with the right people in the industry. Working internships is a smart way to handle financial expenses in college.
2. Tell them the value of money
Tell your kid about the value of money, how difficult can it be to earn, and help them understand their responsibilities from an early age. It will give them a realistic view of the world. It may be a little disappointing to hear, but it is better than painting them a rosy picture and telling them that getting rich is all about thinking positive thoughts and getting a higher education degree.
3. Ask them to earn a passive income
Your child may be blessed with a lot of talents, and you should encourage him/her to make use of those talents to earn part-time money. Whether it is teaching, writing web content, or coaching sports, there are plenty of ways your child can make money and gain a valuable experience at the same time. The key is to teach your child to play to their strengths when figuring out opportunities for part-time work.
4. Teach them delayed gratification
The next time your child asks you for something, ask them to wait a while before you can buy it for them. It will instill patience into your child—a valuable character trait when it comes to saving money. Help your child understand the value of saving by asking them to put their money in a jar.
When enough has been collected in the jar, your child can buy themselves the things that they wished they had. Another tip is to wait for sales and promotions on items that you want to buy. This will help your child practice delayed gratification and also help them understand how to shop wisely.
5. Tell them to create a budget
Teaching your child to create a budget might be the most important step toward preparing them for their financial future. Making a budget and allocating money to the various expenses will help your child understand where he/she spends most of their money.
6. Watch out for peer pressure
Sometimes, the urge to buy things is driven by peer pressure. The young ones are especially liable to going on a shopping sprees when with friends. They might feel embarrassed in front of their friends if they are made to look like they can’t afford a certain item.
So make sure your child is not influenced to overspend because of peer pressure. If your child does not want to wait until they save enough money, try a little gentle negotiating — give your child a set amount of money to spend during each outing and make them stick to that budget.
7. Train them by starting with small purchases
Train your child by allowing them to make small purchases on their own and keep track of how much they spend and how much change they bring back. Shopping alone can help your child become smarter with money, learn basic shopping skills, and puts them in situations where they’ll have to make money-related decisions.
As they gain experience, increase how much money you give them and also give them a greater freehand to navigate beyond the immediate neighborhood market.
8. Install financial-planning apps
Financial-planning apps and resources are a great way for a child to learn about saving money. There are many different apps and tools available for your child to use that can help them learn about saving money, budgeting and spending.
Some apps even come equipped with games that teach youngsters about the fun and amazing things they can do with their money once they start saving.
9. Create an emergency fund
Students who have been out of school for a while often do not realize the importance of creating an emergency fund. Creating an emergency fund is one of the best things you can do to ensure that your child has a solid start in life. An emergency fund will give you and your child peace of mind when you need money in times of emergencies.
10. Get an Amazon Prime account
At only $59 annually per membership, Amazon Prime can be your child’s best entertainment investment. That annual fee multiplied over four-year time period, makes it practically a steal.
Ultimately, the best thing you can do for your child is to educate them about financial responsibility. Advise and guide them on money-related matters. The more involved you become in their finances, the sooner they can learn about what it takes to start saving from a young age.