About 19.9 million students will attend a college or university this fall. Many of these students will be on their own and – between student loans and possibly getting a credit card for the first time – it would be relatively easy to rack up debt in a short amount of time without realizing it. Therefore, it’s imperative that they begin to make smart financial choices now to avoid overwhelming debt in the future. Here are a few tips to help your college student prepare financially now.
If you haven’t already, start budgeting.
While it’s never too early to begin the process of financial literacy with your child, some college-aged students have never budgeted funds prior to this period in their lives. Creating a budget is a good place to start when considering your financial well-being at any age. Especially for college students, however, it can make quite a difference over 2-4 years. Not sure where to start? These budgeting apps might be able to help.
Do you need all those loans?
It’s true that some incoming students will be able to finance their education without borrowing a loan, but many more will be looking for some sort of financing. Just because the loans are being offered doesn’t mean students will have to take each (or any) loan that comes along. Try to make a decision as a family on which type of and how many loans your student will actually need, which will cut down debt in the long run.
Begin building credit, but don’t go overboard.
College is a period when many students get credit cards for the first time in their lives. Having a credit card is a big step financially, but it can be very tempting to charge items when immediate cash isn’t available. Do that enough, and you’ll dig yourself into a big problem. However, it’s helpful for students to have an emergency credit card just in case something comes up. If your student is going to purchase items with it, make sure they can pay it off by the due date. Doing so will help them build their credit. When graduation comes and they want to start looking for a place to rent or own, having established credit can work to their benefit.
Financially plan for college with Chatterton and Associates
At Chatterton and Associates, we can help you plan for your family’s future, whether you have a child who just entered college or one who is about to graduate. Our Certified Financial Planners can answer any questions you might have about how to prepare your college student financially and create a plan to provide stability. Contact us today for a complimentary consultation.
The Team at Chatterton & Associates