It’s almost August, which means the newest batch of college freshmen will soon be leaving home and moving into their dorm rooms on campus. Help set your college-bound kid up for success with these simple budgeting tips.
1. Budget and Track Expenses
Learning to build and follow a budget is an important life skill that will help your young adult avoid overspending. Explain that being honest about what they spend their money on will make them less likely to make unnecessary purchases in the future. For this tech-savvy generation, there are lots of budget tracking apps that make the process a breeze. Help them choose the app that will work best for them and get started together to set them up for success.
2. Keep Communication Open
Make sure your college kid knows that money isn’t a taboo topic in your family. This way, they’ll see that money management is something that they’re capable of! Keep communication about finances open, and make sure you’re on the same page about who’s paying for college, what expenses they should expect as a student, and whether or not they’ll need student loans.
3. Encourage Money-saving Habits
College students tend to be creative and even innovative in their money-saving habits nowadays. Encourage your freshman to make the most of their money through frugal habits, like cooking and making coffee at home, living with roommates, and cutting back on non-essential technology, like cable. You probably have a lot of tips from your college days to share with them, too!
4. Prioritize an Emergency Fund
It might not come as a surprise that most young people don’t have a financial cushion in case of emergency. Explain to your young adult that an emergency fund is crucial and just as important as paying their bills on time and tracking expenses. Help them set up a savings account if they don’t have one already and set an initial goal of $1,000. Stashing away even $10 at a time will help them build their emergency fund, and will give you peace of mind!
5. Look to the Future
Budgeting can feel restrictive, especially for young adults just getting out into the world. Remind your college kid that planning and putting in the work now will allow them to reap future benefits and eventually be able to live the life they are dreaming of. Helping them see the bigger picture will encourage them to stick to their budget and be responsible with their spending. It doesn’t mean they can’t have fun and enjoy their college years!
Content from Farm Bureau Financial Services