As parents, one of the most important lessons we hope our new college student learns when they go away to school is to manage their (or your) money wisely. In this four part series you will be able to discuss with your college child some very practical steps to insure a financially healthy student by the time they graduate.
Many of us have heard the saying “I am just a poor college student” once, twice or a few times from our kids in college. While that statement may be true on the surface, there is an underlying and amazing opportunity of knowledge about how they can go from “poor college student” to “poor college student millionaire”. Let me elaborate.
During the ongoing Young Money LIVE campus event and speaking tour I focus on “Four Simple Steps to Achieve Financial Health and Wealth Now”. Regardless of a poor or wealthy economic background, any young adult can attain economic wealth by following these four steps.
So let’s begin in our four part series with Step One.
Step One – Start Saving Something – At Least 10% – Automatically
Step One is the foundation to positive financial behavioral change for your son or daughter to become more financially healthy while in school and after they graduate. The key is saving automatically. And this can be done by simply having their bank or credit union automatically transfer at least 10% of their monthly income from their checking to their savings account. For example, if they have $800 per month coming in as income they should automatically transfer $80 (10%) into a savings account. This automatic savings transfer builds solid financial habits that can last a lifetime.
More and more college students are working part time and full time while in school to help pay for school expenses. If your son or daughter does not have a job while at school make sure either you or your child still puts away 10% of this “allowance” you give them into a savings account.
Step Two, “Just Say No Sometimes” is next.