26 May How Parents Can Help Their College Graduate Get on Track Financially
Do you have a “new” member of the family? It may look like the child you sent off to college four years ago, but this is a college graduate who is quickly taking on all the characteristics of becoming an adult! Yay, you’ve done a good job in raising a child who had the knowledge and tenacity to graduate from college, so here are a few more tips to help you help your new adult get on the right track financially:
• Don’t Revert to Your Old Habits: Let your graduate know that you respect him/her as an adult and set up new rules for living together. Clearly lay out your thoughts regarding job expectations – turn the tables around so that you stop giving your child an allowance and start collecting some rent. You don’t do your child any favors by continuing to provide financial support for years on end. This is part of the transition from student to adult, and there are new skills which will have to be learned.
• Have a Serious Talk About Student Loans: Don’t wait until the bills start coming due to have a serious discussion on this topic. Gather information about all of the outstanding federal student and parent loans, as well as any private student loans you may have used. Find out what the monthly payment is on each and discuss who will be responsible for payment. If necessary, take the time to look into loan consolidation or income-based repayment plans. These have pros and cons, and you must make decisions together that are based on your individual financial situation.
• Set Up a Budget: Help your graduate figure out how much money will be needed on a monthly basis for rent, student loan payments, car payments and insurance, gasoline, health insurance, and other expenses. This will lead to a serious discussion of the type of job that is needed to cover these costs.
• Get Ready to Kick Your Child Out of the House! Yes, this sounds terrible and, no, it doesn’t have to be done right away. Your child just moved back in and you might be thrilled about that, but there should be a clear-cut understanding of how long this opportunity will last. Let your child know that he or she has a year or two to find a job, get on track financially, and move on to the next phase in life. It will be another sad transition, but it is what you have all been working for all these years.
Definitely take time and celebrate this terrific achievement, but don’t let your graduate rest on his or her college laurels all summer. Continue your role as parent and provide solid input and advice on how to make financial decisions based on information. This could be some of the most important advice you give, if your now-adult learns how to handle money responsibly and gets a head start on life!