Emily Yamanishi knows first hand how much fun college can be, and how tempting it is to forget finances. "In college, because there's that sense of freedom, I think kids can overspend."
But Emily knew from the start that her parents couldn't pay for everything, so she found a job. Then she set up a budget and followed it.
Certified Financial Planner Phil Cook says Emily learned a valuable life lesson early. "The budget for a student is the holy grail they must live with day in and day out and if they don't and they blow the budget and miss two or three days of meals they'll probably take that lesson to heart."
Cook points out it doesn't have to get that desperate if parents have "the money conversation" with their kids before college even starts.
Make sure the child understands the "bank of mom and dad" will be shutting down over the next few years and that they're going to have the responsibility of handling their own finances.
Teach them how to make a budget. Then go shopping together so they learn about smart buying. Encourage them to avoid credit cards so they don't use what they don't have. If the plan is for the parent to chip in for things like spending money or apartment rent, consider sending monthly checks instead a lump sum to cover an entire semester.
That way if there are any issues, you can identify them early on and work to correct them.
Emily's advice to recent high school graduates about to hit the college campus? "You're not spending more than you can afford and you have to know how much you can afford."
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