Fill in the Gaps in your Child's Financial Education

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Fill in the Gaps in your Child's Financial Education

Lessons to help college kids become financially responsible adults.

November 20, 2014

Four or more years of higher education may have given your child a great career start, but your graduate might still need some real-life skills on how to responsibly handle money. As young adults, your children will need to know how to:

  • Budget and pay bills on time. Explain how to budget for utilities, food, gas, insurance, rent and cellphone service before spending on discretionary items. In addition, reinforce the idea of paying bills on time so your children will know what’s left for saving and how much they can spend on other expenses.

  •  Save for a rainy day or a large goal. Help your children establish good saving habits and set them up for a successful future. Encourage them to set aside a percentage of each paycheck toward large goals – maybe funding a 401(k) or saving for a down payment on a house – and save three to six months of expenses in an emergency fund.

  •  Manage debt. Many college students graduate with student loan and/or credit card debt. Show your children how quickly credit card debt, fees and interest can accumulate and get out of hand. Help them be smart about using credit wisely. Be sure to also discuss fees involved with some banking accounts.

  •  Build credit. A debit card won’t help build credit. So talk to your kids about ways to build credit, including paying any bills in full, on time, every time. Building a good credit history could help increase their chances of borrowing at lower rates later on, say for a mortgage.

  • Manage money. Explain the basics of investing, including the benefits, risks, costs and tax implications. A strong foundation here can help your children make smarter financial decisions later.

For more guidance, visit moneyasyougrow.org and consult your financial and tax professionals.



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