Making the transition from high-schooler to college student involves dipping their toes in the real world and making important financial decisions.
The first piece of this is paying for tuition – whether or not the parents pay, there are scholarships involved, or that student loans are leveraged (55% of students took out loans in 2020).
The second part, and just as important, is learning how to make smart financial decisions as a young person. If they’ve never budgeted before, even the most common expenses, such as groceries, could give them sticker shock.
Get ahead of the curve and use the following as conversation-starters with your new college student.
Many college students have never created a budget and don’t know where to start. Even if their tuition is covered, there are still a lot of other expenses to consider. Encourage them to track spending carefully in their first semester and use that to make lifestyle adjustments where necessary
Food and Dining
Different meal plans have different benefits. It’s important for your new college student to select one they will actually use and not just the shiniest offer. If they aren’t on a meal plan, groceries and dining costs could add up very quickly. Teach them how to budget for meals out and the difference between going out to a restaurant versus cooking at home.
What mom or dad did for free, even the nicest of apartments probably won’t. Those quarters add up, as do the costs of detergent and other cleaning agents. Make sure they’re prepared to pay for small – but necessary – items like these.
Your college student may be in charge of paying rent and utility bills for the first time – have you taught them what to look for and what to expect? Additionally, choosing a roommate is not only a personal decision but a financial one. Talk about what to look for in a responsible roommate who can afford your student’s living situation.
It’s easy for a first-time college student to be overwhelmed with the financial responsibilities that come with independence. Talk with them about what to expect and how to best prepare, and help set them up for success.
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This content is provided for informational purposes only. It is not a guarantee of future success, is subject to change, and is not intended to serve as the basis for an individual’s financial decisions. Investing involves risk, including the loss of principal. Strategy Financial Group does not provide specific legal or tax advice. Please consult with a qualified professional for guidance on your individual situation. Investment advice is offered through Strategy Financial Services, LLC, a Registered Investment Adviser. Insurance and annuity products are offered separately through Strategy Financial Insurance, LLC.