College: the land of newfound independence, temptation, and the growing realization that in four years or less, your child will be responsible for making his or her own money (you hope). It’s a scary prospect for most, but some smart financial choices can help make the jump into adulthood less intimidating.

These are conversations you should be having with your child as he or she is entering college. 

BUDGETING 

Sure, when they were in high school they had to pay some attention to what was coming in and going out. But now your child is really on their own. They need to be brutally honest about what they need. After they’ve sorted known costs — whether that’s chipping in for tuition, room/board/rent, transportation — they need to really level about the money they’ll spend beyond the brochure. How often will they go to go out to eat, how much coffee will they buy, and what will free time (parties, movies, shopping, etc.) cost? There are also dues for clubs and organizations they might want to join, and those often include added costs for uniforms and social events down the line. Work out how much money they want to spend, and how much they will actually have to spend. Now is not the time that they should get into the habit of using overdraft protection.  

BUILDING CREDIT 

There are few things a credit card company loves more than signing up a college student. Hint: It’s not because they think their card will be paid in full every month. It’s easy for your child to look at their first bill, see the minimum amount owed, and consider it a little gift, like a parent saying “don’t worry, $20 is good. I know you’d give me the full $80 if you could.” Help your child understand how they are essentially taking a loan that they will have to pay back with interest if they don’t pay their balance in full each month.  

That said, a credit card that’s used responsibly is probably a good idea so your child can start to build good credit, which they will need when they really go out totally on their own. 

AUTOMATING SAVINGS 

Help your child understand the benefits of setting a little aside each month. You’ll both be so much happier when graduation rolls around if they have a little nest egg. Make it really easy by helping them automate a monthly transfer into their savings account. The ideal amount is something big enough to accumulate, but small enough that it won’t be too great a pinch every month. If it’s a miserable experience, they’re more likely to dip into savings early and often or quit altogether. 

STUDENT LOANS 

Student loans are a great way to make a college education possible, but they aren’t magic: When your student graduates, it’s likely he or she will have to start paying them back. Make sure they understand their loans and that they’re on top of all the payment scenarios, including consolidation and deferment.  

MAKING MONEY 

If your student doesn’t need to get a job during the school year, it’s perfectly OK to focus on studying. But summers are a different story. The idea of lazing in the sun and giving their brain a rest is a lovely one, but neither their bank account nor resume will be better off. A sound financial and professional choice is to start to fill their resume. It will have the added bonus of filling their bank accounts, too.

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