Is your child leaving for college soon, if so there’s no doubt about the fact that money will be on your mind, and their’s too. After all, there are a lot of expenses to consider including tuition, accommodation, books, supplies, etc. A child leaving for college can be an overwhelming transition for you and your children. It is therefore imperative to teach them some basics about finances before they depart.

Every teenager should grow up with a good understanding of certain financial concepts, and this will serve them well in college. Parents should teach their kids about money when they are young so they are well-prepared by the time they leave home. Then they can grow up to be independent, financially-savvy adults. Here are some important financial concepts your child must know before leaving for college –

EMPHASIZE THE IMPORTANCE OF SAVING

Right from the time your teenage child starts receiving allowances, you should impress on him or her the need to save. Your kid should be taught to set apart a certain amount of the money they receive. Whether their money has come from daily allowances, from relatives, or whether they have earned it from tasks around your home or a part-time job, etc. Understanding and starting this early will go a long way to ingrain in them the habit of saving. And this will come in handy when they leave for college.

BUDGETING AND DELAYED GRATIFICATION

Despite the fact that kids may not fancy the concept of delayed gratification, they are capable of learning basic budgeting concepts. Teach your teenager how to create a budget, or what DebtWatchers likes to call a Spending Plan. What about even creating one together? This will go a long way to helping them to manage money better when they are away. Fortunately, you have access to a lot of resources that can make setting up and tracking a budget seamlessly. As part of that process you can help your teenager to write down his or her savings goals. You can even set automatic alerts for notifications such as when the bank balance drops below a certain threshold.

HOW CREDIT AND DEBIT CARDS WORK

A child leaving for college will get pushed to take a credit card once there, after all they are vulnerable. The credit card companies take the opportunity to push their products and at least obtain their contact details for marketing purposes. Although your kid may not necessarily fall in to the trap and take out a credit card, understanding how they work from can prove to be helpful when they do eventually receive one.

Some of the basic things that teens should know about credit cards include the rate of interest on credit cards, reward programs, annual charges, etc. And for them to learn that they are being sold something which it is easy to live without provided good financial disciplines are followed. Having a debit card is far less dangerous as they can only be used if there is money in the account.

THE IMPORTANCE OF CREDIT SCORES

Even though your teenager may not be able to do much about their credit score at this early age, teaching them about credit score is not a wasted effort. Showing them how credit scores work is crucial to laying a good foundation that they can build on in adulthood. Your teenagers will be better prepared when it is time to start building their credit history.

MONEY FOR YOUNG MINDS COURSE COMING SOON

Teaching your kids about money will equip them with the needed financial literacy that will serve them throughout college. Your teenager will be less likely to have problems with debt, save more and make plans for the future. Impress on your kids the importance of developing good financial habits at an early age and try to do your best to set a good example. Our Money for Young Minds course is a great place to start. Sign up for this course to have access to financial tools that you can use to teach your kids about finances.