When you send your student off to college, it is important that they have a good financial foundation. Financial education for college students gives them the ability to properly make important decisions based on their finances. College is often the first time that a budding adult has to make daily financial decisions, and it’s absolutely essential that they feel prepared.
Why is financial literacy so important for college students? Because college is often the first time these students are on their own. They may have to save money for food, entertainment, and school-related expenses. Without guidance, choosing the wrong financial path can lead to prolonging life goals such as owning a home or starting a family. Financial education for college students encourages family conversations, hands-on learning opportunities, and financial independence.
Consistently starting money-focused conversations with your college student can not only help them keep their budget in check but can also help you proactively meet needs that may arise.
It is very difficult to teach your child about financial literacy if you are currently struggling with it yourself. According to the National Foundation for Credit Counseling®’s (NFCC®) 2019 Consumer Financial Literacy Survey, 60% of U.S. adults have had credit card debt in the past 12 months, and nearly 2 in 5 (37%) carry credit card debt from month to month.
If you want your child to succeed financially, you will need to get a handle on your own finances as well. The first step in managing your money is to create a budget. The majority of us have more “wants” than we can truly afford. This has become more apparent since credit cards were introduced.
Once a budget has been established by balancing your income with your expenses, begin eliminating any debt that is weighing down your monthly budget. Working to eliminate debt can be a long process but it is worth the effort. After the debt is under control, you can save money for emergencies and long-term goals.
A consistent relationship with a financial advisor is recommended for accountability. Involving your college student in this meeting will hone his or her financial skills and increase the likelihood that he or she will seek a financial advisor later in life.
Your college student is unlikely to be carrying a mortgage or providing for a family; however, the earlier you can prepare your student for real-world scenarios the better.
Financial education for college students should start long before filling out a college application or understanding the FASFA. The sooner you can educate your student, the greater the chance he or she has for long-term financial success.
