5 Steps to Prepare Your Graduate for College

High school graduation is quickly approaching and so is another chapter in their financial journey. College is a great opportunity to continue developing good money management skills for when they graduate and head into the workforce full time.

At Home State Bank, we’re passionate about educating about financial responsibility and opportunities. As we approach this fun milestone, we want to share some tips for parents to send off your student to college to make sure they start off on the right financial foot and set themselves up for success.

1. Build a Budget

It’s probably the last thing your student wants to hear but teaching them how to budget is crucial to their financial foundation. Whether you’re helping them out, they are fully paying, or some other combination, everything should be budgeted so they understand current and future costs.

Things to include in this budget should be room and board or rent, food, insurance (health and vehicle), gas (if they will be taking a vehicle), books, utilities (if renting), and entertainment. There could be additional expenses depending on each student, but these basics should get them started. Write them out with the costs and due dates to help them establish a schedule for paying bills and managing their money.

2. Save and Spend

As your student builds their budget, it’s important to differentiate between needs and discretionary spending while also taking into considerations any savings goals they want to work towards. Saving goals could include a down payment on a vehicle, an apartment, or a trip. Help your student determine smart saving and spending goals to guide them in making financial decisions.

3. Build Credit

College is a great time to start building their credit score, but students need to be educated on best practices with a credit card, for instance paying off the balance each month to avoid interest charges. Open a small credit card and establish rules for using it, such as a specific spending limit under the card limit and for emergency uses only. While credit cards could lead to some financial trouble with guidance and education, they can be a big benefit to your student when managed well.

4. Part-Time Work

Applying and taking on part-time work is a great way to help your student grow their bank account and teach them to manage their money. Many school jobs offer the opportunity to work and complete their homework or school needs. Encourage them to seek out employment opportunities on campus that allow them to earn some money and manage it to reduce financial stress.

5. Smart Spending

When it comes to discretionary spending, you can support your new college student in sharing ways to save money around town and on campus. Shopping secondhand, looking for free entertainment, and using their college ID for local deals are a great way to save some money while not having to miss out. Encourage your student to look up or ask about free entertainment and groups around campus so they’re ready when school begins to fill up their social calendar!

In addition to the above, ensuring your student’s checking and savings accounts are in order is a great way to prepare them for this next big step. Stop in to Home State Bank today to open or make any adjustments before you send them off this Fall. Our Universal Bankers are here to help answer questions, offer resources and tools, and make sure everyone is confident and ready for college!

Home State Bank is Member FDIC and Equal Housing Lender