Here are two very good reasons to begin teaching your kids about money before they go to college:
- So they don’t spend all your money in college.
- So they don’t spend all their money after graduation.
High school and college students today are somewhat familiar with handling money. But that doesn’t mean that they understand credit, practice money-saving techniques or could make a budget and adhere to it. Some kids may be interested in learning more about finances, others may not. We’ve listed some techniques below that might make teaching your kids about money a little more fun and the outcome more likely to be successful:
1. Work Together
We’ve already devoted a section to college budgeting and college expense planning. Your child knows how much things cost at college; you know how much you have to spend. Together you can make a pretty accurate college budget. Working on the budget together gives you a better chance of ensuring that your child will stick with the plan. If your child understands the big picture and what your family has to sacrifice to pay for all of those expenses, hopefully it will make him/her more conscious of what they are spending while on campus. It may also encourage him/her to look out for scholarships at school and to take steps to apply for them. To learn more, check out our college budget examples.
2. Use Computer Programs to Get Organized
Does your child spend an inordinate amount of time in front of the computer? Use it to your advantage. Ask your son or daughter to use a computer program like Excel or Quicken to create the college budget with you. As they teach you new software tricks, you can point out important financial imperatives.
3. Use a Financial Expert
If your college student is receptive to financial topics, but not to you, find some expert advice they would be interested in listening to. There are several personalities like Dave Ramsey and Suze Orman that have popular radio programs, television shows and books on personal finance that you and your child could enjoy together.
4. Creating Boundaries
If you have tried all of the fun and academic ways to teach your kids about money, and they are still overspending, you might have to practice some tough love. It may be that just asking your child to write down their expenses will help you to see where the problem lies. Maybe they are having consistent car trouble at college or they aren’t shopping around enough for plane tickets home. Knowing the specifics will allow you to work with your child on solutions.
If your child is spending too much on “extracurricular activities,” consider imposing spending limitations or asking your child to get a part-time job to help with their expenses. In extreme cases, you may have to take away a credit card, privilege or luxury item (like Spring Break) to make your voice heard. Nobody wants to be the bad guy, but you also need to quickly address these financial concerns and get your child back on track.
The lessons you share with your child will go a long way towards financial success at college and beyond.