As a counselor for high school students and their families, I am often warning about the hazards for not providing some financial sense to students before they leave for university. Sending a child on their own with little experience managing their own budget is setting them up for failure. An 18-year-old is not expected to have the same priorities as an adult with a full time job and bills to pay, but every student must deal with appropriate choice making and the consequences that come from mismanaging their money.

I imagine that the largest risk for college students is the access to consumer credit. Having a credit card is a safety blanket for some parents as their child goes away, but that is more like a gateway drug for poor management in the future. Credit card companies rely on students spending more than they can pay back, and many college students are happy to oblige. Students should try to use cash only if possible, or only use their debit card.

Student loans cover the cost of tuition and fees, and there is often some leftover amount that goes to the student account. That money can be sent directly to the loan company, but instead the student can misspend it.

Students are buying poor food choices, alcohol, vacations, games, accessories for the dorm or apartment, and clothes. College offers much more freedom during the day than a high school schedule. When we get bored, we think of ways to entertain ourselves. If we have money, sometimes that will be spent without thinking long-term. 

Students can eliminate unnecessary spending by not accepting any more funds for their classes then they need. They can put any potential extra money in a savings account at a bank that has withdrawal restrictions. Students can try to cook more as a group in the dorm kitchens and in their apartments to avoid higher costs of eating out alone or at restaurants.

Students can earn money in a variety of ways. They can work on campus or off campus. Weekends and afternoons are often potential free time for students. There are also options for volunteering during those times. Community centers are places that hire younger people; mall stores in college towns are often flexible with work shifts. During summer, people can stay in town to work, or return home and save money for the next semester.

University students can set up their own investment accounts and IRA’s, but they might not come to that decision on their own. Even having some savings for when they graduate and are in that in-between moment before they find a job can be something a student should think about before its too late. Students should be aware of what a mutual fund is, the concepts around debt repayment and the concept of interest rates.

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