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May 20, 2020

Prepare Your Graduate for Financial Success

Help your high schooler confidently manage money in college.

According to Everfi, 13 out of 20 students surveyed graduated without taking a single personal finance class. That means 65% of those students who are going to graduate four-year colleges with an average student loan debt of $28,000 may not know how to create a budget or balance their check book. Here are a few skills and resources to help your student leave your home confident in managing their finances and understanding student loans.

Long-term Financial Planning

After graduation, the reality of ten-year student loan repayment sets in. Help your student set long-term financial goals and create a step-by-step plan to manage their loans so they can achieve stability and reach their financial goals. Teaching students to understand a budget can help prevent them from experiencing lifestyle creep, where small, everyday spending grows too high for their income.

Create A Budget

Planning ahead sets your student up for success. Figure out what items they will need to plan on paying for during college. Review how they have been spending currently and set up a plan to help them prioritize what they use their money for. Whether it’s creating an envelope budget, or utilizing a digital tracking app, find a way to help them review and control their spending habits. Giving them the tools to empower them to pay their rent and utilities will get them one step closer to financial independence, something every student aims for.

Understand Loan Options

Most students don’t realize the impact of interest rates or repayment plans. Some students won’t get a job right after graduation that can fund rent, utilities, groceries, and their monthly payments. If your student opts for a loan to pay for college, make sure they see the calculations and understand what to expect during the repayment period. Many loan providers offer multiple repayment plans. Help your student find the repayment plan that works best for their income and financial goals.

Renting and Paying Utilities

Most students start their college career in the dorms, but that won’t last forever. Make sure they know what to expect when renting their first apartment or home. Learning to manage rent and split bills with roommates will help them in the future when they are getting ready to buy a house. Living takes money and most teenagers aren’t aware of typical living costs. Run experiments and show them what your family budget looks like.

Importance of Emergency Funds

Prepare your students for the worst or for that first month then they realize they spent all of their rent money eating out with their friends. Having cash to fall back on is not only helpful for them, but also prevents you from unexpected payments when they ask you to help pay their bills.

If you want help teaching and preparing your child to manage money, call your local branch to speak with a personal banker. We’re here to help and would be glad to talk through tips and strategies and pass along trustworthy, useful resources.