Three Tips for Parents Getting Their Kids Financially Ready for College

Sending a child off to college is a major step for both the student and the parent. Suitcases, bedsheets, and notebooks all need to be bought and packed. But they’re not the only things your college-bound young adult needs… For the first time in their lives, they’re about to be solely responsible for their own financial success.

They’ll need as much financial guidance and advice as they will bedsheets and notebooks…

To make sure you set them up for both academic and financial success, follow these three tips:

Instill the habit of spending less than you make

3 - 4 = -1. Most people know this. If you lose more than you have, it’s worse than if you just lose everything. Why? Because now you’re in debt. 

It’s common sense, so you’d think most people would spend less than they make. But, in reality, very few do. Every month, people earn their paychecks and spend it all plus a little extra. Now, every now and then, this will happen naturally and isn’t all that bad. It becomes a problem, though, when it happens repeatedly and unbeknownst to the spender. 

Most of the time, this isn’t from lack of self-discipline, but from a lack of understanding. People don’t want to uncontrollably waste their money every month. People don’t want to spend more than they make. But, because they haven’t been taught how to do the opposite, save more than they spend, it naturally happens. 

Teach your college-bound student to avoid spending more than they make by naming their cash. In YMU’s Do Money Differently course, Todd walks them through how to name their cash and track their expenses every month. Watch the first module for free!

Get them to apply for scholarships like it's their job

There’s no such thing as free money… unless it’s a scholarship. 

The financial burden of college on both the student and the parent can be heavy. Any help making that burden lighter could mean the difference between a good college experience and a bad one. One of the easiest, most efficient ways to offset the cost of college is through scholarships. 

Free from the crushing debt of student loans, scholarships are varying quantities of money awarded to students for any number of reasons. There are scholarships for left handed people; for children of immigrants; and even for good sci-fi/fantasy writers! 

The criteria is so wide that your student can easily find their niche. What’s more, over $100 million of scholarships go unawarded each year. There are plenty to go around. 

So, work with your student both before and after they leave to apply for scholarships. Frame it as a full time job. Set hours with them. Hold them accountable. Your efforts will bear good financial fruit. 

Advise them to choose loans carefully

Even with your best efforts, sometimes you won’t be able to cover the cost of tuition or living. This is where student loans come into play. 

Debt should only be explored after all other possible resources have been exhausted. Don’t look into loans as your first option for paying for school. Instill in your student that graduating debt free from college is one of the greatest things they can do to set themselves up for a life of financial success. But, if all of the options above have yielded no fruit, loans can be considered. 

Start the conversation by clearly identifying how much money they need and for what period of time. Even if you need to take out a loan, take out as little as possible for as short a time as possible. Only take what you need. Tell your student to look for other sources of income while they’re expenses are being paid for by the loan. 

Next, be sure to compare rates. This is where loans become heavy. The higher the interest rate, the longer and harder it will be to dig out from underneath the debt. Shop for the loan with the lowest interest rate you can find. 

Keeping these financial tips in mind when sending a child off to college will help set them up for success. This’ll be the first time they have to deal with their own money. Make sure they know how!