Fall semester is quickly approaching! It’s time to have the money talk with your freshman. Set them up for success with these college budgeting tips.
1. Money Talks: Keep Communication Open
One of the most important things that parents can do for their college-aged children is show them that money is not a taboo topic. If they see you as someone who’s comfortable discussing financial matters, they’ll understand that managing their own money is something they’re capable of achieving.
Have the talk to make sure you’re on the same page about:
- Who’s paying for college, and how?
- What expenses should your student expect besides tuition?
- Will your young adult need student loans? What’s the best way to manage them?
2. Budget and Track Expenses
Building a budget habit is crucial. Explain to your young adult how starting to budget now helps them avoid the dangerous trap of overspending. If they’re completely honest about what they spend their money on, they’re less likely to make unnecessary purchases that’ll cost them later.
Nowadays, there are many great apps that make budgeting a breeze. Read about them together to find the perfect one for your family.
3. Get Creative to Cut Costs
One skill that many college students develop over time is the habit of saving money in innovative ways. If your family is paying for tuition, it’s always a good idea to stretch extra money as far as you can.
A few ideas to consider:
- Switching to a capsule wardrobe or selling gently-used clothing
- Cooking and making coffee at home
- Living with roommates
- Cutting back on cable and non-essential tech
Encourage your young adult to get creative, and maybe even find a challenge that you can do together!
4. Prioritize an Emergency Fund
It’s scary to think that most young people have no financial cushion in case of emergency. Help your college student understand that having an emergency fund is no less negotiable than tracking expenses or paying bills on time.
If your college student has no savings yet, help them set an initial goal of $1,000 (and enlist the help of an app, if necessary). Stashing away even $10 at a time is a step in the right direction.
5. Consider the Future
Budgeting can feel restrictive, especially to someone just beginning to enjoy the freedoms of adulthood. But investing in a budget and a financial plan is like investing in an education; it’s putting in the work now to reap the benefits later.
Help your young student understand the power of their choices by putting things in real terms. In five to ten years, having savings and paying off debt could mean a lot of things: more choices in the job market, a hard-earned vacation, or being able to enjoy the lifestyle they dream of. It’s a trade-off for the things that matter most. Your Farm Bureau agent can help you get off on the right foot with smart budgeting tools and savings advice.