Prepare Your Student for Financial Success

Prepare Your Student for

FINANCIAL SUCCESS

Life after graduation is something that all high school students routinely fantasize about. While they may be thinking about all the fantastic college parties they will attend, it is your duty to make them think about the financial milestones they are about to experience. According to a study by the University of Michigan Institute for Social Research, "most students devote about one-half or more of their earnings to discretionary spending on relatively short-term wants and needs."

Aside from reckless and impulsive spending, the main danger your young adult will face during their college years is aggressive marketing from credit card companies. It is no secret that many major credit card companies deliberately target the young and financially inexperienced. If your teenager is planning to apply for a credit card, teach them to avoid debt by never charging what you can't pay back within a month.

During this age range, escalate the monetary value of their savings goal. Have them draw up a budget for any recurring funds they may receive. Prepaid debit cards are an excellent way to prepare teens for the "real world" - overdrafts are typically not allowed, you can add funds electronically, and many companies provide online budgeting resources to help track spending.

Once your kids turn 18, you will lose a great deal of control over their spending habits. By planting the seeds of smart money management early in their lives, you are directly influencing the success of their future. Even if you have subpar financial skills, it is never too late to learn and pass the knowledge on to your offspring.

The key concept to remember is that you must spend less than you earn to avoid financial hardships. Everything else will eventually fall under that umbrella. Teaching your children about saving, avoiding debt and planning for contingencies will set them well on their way to a life of financial happiness.