What Your Student Should Know about Money before College

0 comments Posted on May 1, 2018

by PeggySue Wells

“May the Lord make you increase, both you and your children.
May you be blessed by the Lord, the Maker of heaven and earth.”

Psalm 115:14–15

Money is the commodity that defines much of our quality of life. College bridges a child into adulthood, and having launched seven into college, here are the financial skills I didn’t want my freshly minted adults to leave home without.

Financial freedom is possible.

My financial health, like my physical and emotional health, is my responsibility.

God is my source and all things are Himpossible.

I can earn money.

Whether a college student earns funds playing music at a rest home or serving as a barista, the next step is managing their income.

Give the first 10% to God in appreciation for His provision.

Pay yourself. Save 10–20%.

Spend less than you earn.

I helped my students acquire these financial tools:

Checking account. Most banks offer student accounts free of fees.

Savings account. Any deposit is a good deposit.

Investment account. Open a certificate of deposit, or mutual fund with a group such as Vanguard. You work for money. Get your money to work for you, earning interest or dividends.

The Power of Accurate Records
Mistakes in recordkeeping are costly and have been our biggest learning curve. My generation recorded deposits and deductions, and I spent or didn’t spend based on the amount in my register. Today, internet banking gives instant, but usually inaccurate totals. Payments can take days or weeks to process.

Help your student establish an accurate system to track spending and available funds. Several of my students overdrew their account before learning this concept. The best lesson was to let him handle the deficit and the fees. I was available to brainstorm solutions but not to rescue.

Once checking and savings accounts were managed with good recordkeeping, I added my student to my credit card account with a limit. We outlined what could be charged and covering the monthly payment.

College Rules
My college students thrived when they knew what I would pay for and what was their responsibility. We considered car insurance, cell phone and medical.

As a parent, I helped finance college as long as grades remained at C or better.

I paid auto insurance as long as my student kept a good driving record.

My student found textbooks at the best rates. Books were rented, borrowed, found through the library, and on the internet.

Unspoken Rules
Many families have unspoken rules around money. “We can’t afford it” and “Money doesn’t grow on trees” are clichés that speak volumes when they are the deciding factor for what a student is allowed to do. Parents quickly teach children lifelong lessons by how we talk about, handle and manage money.

Are finances a tool toward creating our lifestyle or is money a strict dictator? Do we live in a spirit of poverty and scarcity? Or do we believe God owns the cattle on a thousand hills and gives good gifts, increase and abundance? Am I teaching my student about possibility or limiting all of us to probability?

Positive responses I gave my students include, “Wow, that’s a great goal. How can we make that happen?”

“What ideas do you have to help fund this?”

“Let me think about this.”

Abraham, Job, David and Solomon were abundantly wealthy because God gave them abundance and increase. Lydia and the Proverbs 31 woman were lucrative businesswomen. Money is not evil. The love of money—greed––or anything we value more importantly than God is idolatry. Money is merely a tool we learn to use wisely.

Items and opportunities come along regularly that line up with my student’s dreams. My response is, “Let’s see how we can make that happen.” We brainstorm mechanisms to make the dream reality.

Freedom in Budgets
Considering finances, we build backwards.

Help your student make a list of what he wants his lifestyle to be.

Learn finances. My students attended Dave Ramsey’s Financial Freedom course. I gave copies of Suze Orman’s Women and Money to my daughters and $50 for each of the book’s five-steps toward putting their financial life in order they accomplished.

Pay bills when they arrive.

A budget spells freedom. Debt mortgages my present and future, and prohibits me from going and doing my God-given calling. My students responded well when they saw me be wise with my own finances.

“Today we’re sticking to the dollar menu,” I’d say when that’s what the budget allows. Other days I let them know we can be more extravagant. “Order whatever you want.”

Shopping for groceries or clothes, I give them an amount and they make smart decisions. When a request is beyond the budget, I reply, “Not today and thanks for asking.” Other times I say, “Add that on the shopping list for next time.”

Use the library for DVDs, books and audio books.

If you have family or friends who give holiday gifts, let them know your student needs clothes, gas cards or funds toward college.

Organizations you participate in such as your church, 4-H and Civil Air Patrol may offer college scholarships.

Learn from each other. My college students share resources they use.

When you and your student don’t know what to do in a financial situation, seek wise counsel. Then make an educated choice. Choice is always yours, and your most powerful tool. Even if you make a second-best decision, trust yourself to learn and make excellent financial decisions.

Look Back
Take stock of your finances. Establish a working budget.

Move Ahead
What steps can you begin today to achieve your financial goals?

PeggySue Wells is the bestselling author of more than two-dozen books, including Rediscovering Your Happily Ever After, Bonding with Your Child Through Boundaries and Slavery in the Land of the Free. Connect with PeggySue at www.PeggySueWells.com

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