Student financial responsibility
To Central Parents:
A recent study of over 2000 college students indicates that parent teaching is particularly important to the development of students’ financial habits in adulthood. Before coming to campus, talk with your student about proper financial management. Discuss what their budget will be, how they will pay for various items (cash, debit card, credit card), and how to save while keeping track of finances.
Help your student learn more about managing money by discussing family financial decisions. Show them that you have greater expectations of them to be a financially responsible adult.
- Let them budget for the family groceries, a trip, or major purchase.
- Let them work with you on paying the monthly family bills.
- Talk with them about their college financial aid package.
- Review a credit card and bank statement together.
Most students will be unaware of the expenses of college. Talk with your student in advance about who is expected to pay for which expenses. Possible expenses may include tuition, books, supplies, cable, parking, extra food, entertainment, insurance, or phone bill.
Talk about your family’s views on how many credit cards a person should have. Discuss with your student what you believe is best for them to do with the credit card offers. Suggesting that students discard (shred and throw away) most offers and keep only the most important or intriguing offers to discuss with the family is a good way of dealing with the multitude of offers they may receive. Use the following information to help guide your discussion:
- Credit cards and student loans are not free money.
- These will have to be paid back over time and interest will be added.
- Charge only what you can afford to pay back in the immediate future.
- Pay bills in full.
- If payments for bills are not received on time, often there will be a financial penalty.
(This means they need to be mailed BEFORE the day they are due or, even faster, paid online prior to the due date.)
- Keep a written record of purchases and review bank and credit card statements for accuracy.
- Memorize your PIN number to access an ATM or credit card and NEVER share this code
- Shred credit card offers and receipts and statements with account numbers printed on them.
Positive uses of credit cards:
- Teaches personal responsibility.
- Establishes a credit history (used later when purchasing a car and home, or renting).
- Eliminates the need to carry cash.
- Provides finances in an emergency.
Help your student avoid these signs of unwise spending and overspending
- Frequent overdrafts and over-limit fees resulting from an unclear understanding of the student’s budget and current financial situation;
- Paying bills late;
- Not meeting agreed upon financial obligations (buying books, gas, tuition payment), while having money to buy pizza, movies, and music;
- Consistently paying only the minimum payment on credit cards;
- Using one credit card to pay off another