05 May Top Money Lessons to Teach Your Child Before College
One of the questions that parents ask most often is, “When is it too early to discuss money with my child?”. I believe that it’s never too early to talk with your child about money. The sooner you can foster a positive relationship with money for your children and family, the better. The money lessons you teach your student at an early age will impact how they view and use money for the rest of their life.
As a college financial aid advisor, I’ve seen many situations where poor money choices hurt students and their families. Like a student getting invested in a school before realizing you can’t pay for it, wasting money and time applying to schools out of your financial reach, using a credit card unwisely during school years impacting a credit score for many years to come, and taking out the maximum amount of loans without a second thought. Situations like these can be easily avoided with smart money lessons and honest financial discussions.
Wondering where to start? Here’s a few of my favorite money lessons!
Know the difference between needs and wants.
Life has a few basic needs – food, shelter, and clothing top the list. But we don’t need more food than we can eat, more house than we can fill, or more clothing than we can wear. Those are wants. The same is true with a college education. A more expensive school doesn’t mean the best education. Many lower-cost colleges offer wonderful educations at a fraction of the cost. Your student has to understand what is a “need” and what is a “want” when it comes to a college education.
Neither a borrower nor a lender be.
This one applies to students and parents! Many parents feel they have to be responsible for the entire cost of college for their student. But, if the student has no fiscal responsibility, the amount due can become the parents’ responsibility. To top it off, your student has learned nothing. The same goes for saving too. If a child is involved in saving money for school, making money decisions and borrowing money wisely, these lessons will help pay for college. These lessons will also support their chosen lifestyle after graduation.
A penny saved is a penny earned.
It seems like saving money has gone somewhat out of style, and that everyone likes to live on borrowed money. This approach leaves nothing for the future. A child who earns an allowance and uses money to make small purchases goes on to be a high school student who takes summer jobs to save money. This money lesson is all about teaching responsibility and forward thinking.
Money conversations are hard. No matter what, it’s going to feel uncomfortable. But that’s okay! Temporary discomfort will allow both you and your student to feel confident about how they look at and use money. Avoiding money conversations can create more permanent damage for your student – like lifelong debt or misuse of money. If you want to learn about more of our top money lessons, check out our recent post here.
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CFAA helps with the financial aid process, from completing the FAFSA and completing the CSS Profile to reviewing the SAR, responding to requests for verification, comparing financial aid offers and understanding student loan options. Schedule a CFAA 15 Minute Power Chat to learn more about finding ways to pay for college. To get the latest financial aid information and college application to-do lists, look for my bi-weekly JustAskJodi emails and check out my monthly CFAA e-newsletter.
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