(BPT) - Summer may be in full swing, but the fall semester is right around the corner. Your family will be busy helping your student pick out decorations for their dorm room, plan move-in day travel and other pre-college errands. Why not use these tasks as financial lessons for your college-bound child?
Financial skills are vital and your student may not pick up this knowledge in the classroom. Now is the time to equip them with these skills before they head off to college. Check out these six financial lessons you can teach your college student this summer!
1. How to set a budget
Before your student ever sets foot on campus, you and your student will be spending money to get them ready for their fall semester. According to a recent College Ave survey, some summer expenses you should plan for include electronics ($1,028 on average), travel and transportation ($638), dorm room essentials ($560) and new clothes ($380).
This pre-college spend is a great opportunity to teach your student how to make a budget. Have them make a list of items they'd like to purchase and how much these items typically cost. Next, if you're planning to contribute to their spending fund, tell them how much you can give so they can determine how much they'll need to contribute.
Once they have all this information, show your child how to make a paper or digital budget that can help guide their shopping. Don't forget to emphasize the importance of sticking to a budget!
2. Ways to save
Cost-saving strategies can help your student stretch their budget. Teach them tips and tricks to save. For example, instead of buying textbooks, encourage them to rent them or find secondhand textbooks from older students at a lower price.
Transportation is another expense that can put a dent in your child's wallet. Help them research campus transportation options so they can avoid the costs of gas, car insurance and routine maintenance.
Also, remind them that many businesses offer student rates. From movie tickets to streaming services to dining, your child can take advantage of these lower prices and have fun while saving!
3. Build credit history for the future
A positive credit history is essential for future financial success. While the majority of college students know having a good credit score is important (77%), only half know how to improve their credit score (54%).
Explain to your child how they build credit history and help them apply for a student-specific card like the Ambition Card from College Ave. With no credit check to qualify, no interest, no late fees and the benefit of cash-back rewards, the Ambition Card makes it simple to start building their credit history. Your child can use the card to pay for everyday purchases, from textbooks to takeout.
4. Build an emergency fund or savings
Saving is just as important, if not more so, than savvy spending. As you help your child set a budget, make sure to teach them how to set money aside for an emergency fund. No one can predict the future. That's why it's important to underscore the importance of setting aside money for a rainy day.
5. Search for scholarships
The scholarship search doesn't end with high school graduation. College students can still qualify for scholarships throughout their four-year program. Their school may even offer major-specific scholarships.
Encourage your child to apply for these scholarships and continue to search for outside scholarships as well. College Ave provides scholarships and sweepstakes for students and parents to help make college more affordable. These promotions are offered throughout the year, so make sure to check back often and apply.
6. Borrow smartly
If you plan on using loans, borrow federal student loans in the student's name first, as those offer unique benefits - such as low interest rates and income-based repayment plans - not typically offered by private lenders.
If you find you still have a gap to cover, consider College Ave's private student loans. College Ave offers good rates, flexible repayment terms and great customer service. Use the College Ave student loan calculator to help estimate your monthly payments.
If you can, start paying back student loans now - even as little as $25 a month - as that will help lower the total cost of your loan.
Don't let college expenses take your student by surprise! By teaching your child these six financial lessons, you can help them stress less about money so they can focus on this exciting stage of life.
College Ave is not a bank. Banking services provided by, and the College Ave Mastercard Charge Card is issued by Evolve Bank & Trust, Member FDIC pursuant to a license from Mastercard International Incorporated. Mastercard and the Mastercard Brand Mark are registered trademarks of Mastercard International Incorporated.
The Ambition Card is designed to help you build your credit history; however, a variety of factors impact your credit including payment history, utilization, derogatory marks, account age, total number of accounts, and inquiries-not all factors are equally weighted.
0% APR. Account is subject to a monthly account fee of $2, account fee is waived for the initial six-monthly billing cycles.
Rewards are not offered by Evolve Bank & Trust and are instead offered and managed by College Ave. Cash back rewards are subject to the Ambition Rewards Terms & Conditions.
