As fall approaches and families begin preparing for the start of school, some households may be coming to terms with their son or daughter heading off to college for the first time. Items are being purchased for dorm rooms, roommates are being met, but are frank discussions of finances also taking place?
Having those important conversations now sets everyone up for success, and allows the focus to be where it belongs: On the many other exciting life events happening over the coming weeks.
Giving your child a more active role in – or even full control of – his or her finances can be an eye-opening (not to mention anxiety-inducing) prospect. Tackling the following topics can help your student better understand responsible financial management – not to mention, help you sleep better at night.
- Financial Overview: Teach your student what it means to deposit into and withdraw from an account. This is, essentially, Banking 101: They should be able to track what is coming out of their account, and be mindful of when they need to make deposits.
- Overdrawing an Account: Students may not understand the adverse impacts that overdrawing an account can have. They should understand that there may be fees when their account has a negative balance, and that that can, in turn, hurt their financial records.
- Paying Your Bills: Paying bills is likely a foreign concept to students heading off to college. Teach them how to read a bill, explain to them the consequences of late/non-payment, and ensure that they feel comfortable handling this responsibility on their own.
The earlier one takes an active role in his or her finances, ultimately, the better off they will be in the future. As these responsibilities are handed over from parent to student, talk openly about what needs exist, and the different account typologies that meet these needs. Together, consider the following:
- Type of Account: Discuss the differences between checking and savings accounts, and which (perhaps both?) is most beneficial to the student.
- Account Capabilities:
- Get the student online banking access.
- Download the bank’s mobile app and learn its features.
- Set up any recurring bills to be paid using the bank’s Bill Pay
- Account Requirements:
- Find an account that has no minimum opening/daily balance
- Understand terms and requirements to avoid unnecessary fees.
- ATM Access:
- Discuss using no-fee
- Know the location of convenient and no-fee machines.
Heading off to college can be an overwhelming time in one’s life – you’re thinking about your new school, having to make new friends, and now assuming some financial freedom. Here are three “Knows” that can ensure the latter is nothing to fear:
- Know Your Account: Understand all of the requirements and capabilities of your account.
- Know Your Banker: Develop a relationship with the banker that opens your account. Save their contact information and utilize them as a resource when you have questions or additional needs.
- Know Your Budget: Know what you owe for bills every month, as well as how much is coming in and out of your accounts. Most importantly, live within your means!
Whether you’re a parent or student, you’ve got enough on your mind around back-to-school season without having to let financial worries creep in. Having open conversations with everyone involved can help everyone get on the same page and ensure that all bases are covered. Remember, your banker is your resource, so don’t hesitate to contact them with any questions you may have – we are here to help!