Five financial guidelines for your college‐bound children

| July 18, 2014

Sending your children off to college can be very emotional. You want your children to be independent, while at the same time still protect them. Read through these five financial guidelines before your children leave for college so you can help protect them financially now and in the future.

1. Budget

If you don’t already have your children on a budget, make one now.

  • Let them know how much spending money (if any) per month they can expect from you.
  • Have them make a budget for things like toiletries, going out to lunch (off the campus meal plan), paying for a date, etc.
  • If your children have to provide their own spending money, review what they have in checking and savings now, add any potential earnings from a work study program or part‐time job, and budget through the end of the semester how much spending money they’ll have to work with on a weekly basis.

Going through the steps of making a budget will help them quickly learn that a daily trip to the off‐ campus pizzeria may not fit into their budget.

2. Credit/Debit Cards

Here are some rules to follow when using credit and/or debit cards.

  • If they are using a credit or debit card for the first time, tell them to keep the card in sight when conducting transactions at the checkout – sneaky people will try to read those numbers off of the card.
  • If the card is in your name or you are a co‐signer, tell them to notify you and your financial institution immediately if a card is lost or stolen.
  • They should also memorize their debit card PIN: Don’t write it down anywhere, especially on the card, and never share it with anyone, no matter what great friends they meet at school. The PIN should not be a number or word that appears in their wallet (such as name, birth date, or phone number).
  • If your children want a credit card to begin building a good credit history, advise them to start out by making just one purchase a month on the credit card, and paying it in full each month. If you cosign a credit card with them, make sure they understand that any late payments will affect your credit history as well.
  • Always log off from any website after making a purchase transaction with a credit or debit card.

3. Mobile Banking

If your children will be using a mobile banking feature, make sure they know to:

  • Password protect the phone.
  • Not respond to a text, call or email from an unknown source requesting personal information.
  • Only download apps from trusted sources, such as your bank website or provider’s app store.
  • Always install software updates, which often come with important security fixes, created in response to proven security concerns.
  • Have a back‐up plan by enrolling in a backup/wiping program before going off to school. You would just have to notify your service provider as soon as possible, and once notified, they could remotely back up the phone and wipe it clean.

4. Identity Theft

Being on their own for the first time means mistakes will probably be made. Discuss with your children the dangers of identity theft and remind them to always protect their personal information. The Federal Trade Commission’s Consumer Information web page has four main ways to do this:

  • Know who you share information with.
  • Store and dispose of your personal information securely, especially your Social Security number.
  • Ask questions before deciding to share your personal information.
  • Maintain appropriate security on your computers and other electronic devices.

5. Insurance

The previous four items were for you to discuss with your college‐bound student. Here are some insurance tips related to your children that will keep you on track as well.

  • With or without a vehicle on campus, keep your college student on your auto insurance policy. If he’s taking a vehicle to school, update your policy to reflect the new college address where the car will be parked. A new address may save you money, especially if your student attends college in a less populated area of the state. If your children borrow a car or are asked to be designated drivers in someone else’s car, you’ll want coverage. You can save money with a “good student discount” (typically a grade average of 3.0 or higher) or a “distant student discount” if your children are attending college 75 miles or more away from your residence.
  • Consider a separate renter’s policy for personal property coverage for living off campus. This will cover personal property and provide liability coverage should a visitor suffer an injury. Renter’s insurance policies are usually very affordable, often times less than $15 a month.
  • If your children are traveling abroad and gone from their college home longer than 45 days, then you’ll want to either ship their belongings home or temporarily store them in a storage facility. This will ensure that their belongings are covered while traveling.

This information has been published previously in a First Command publication.

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