subject: Teaching Your Kids To Budget For University [print this page] Many parents dread the day that their child will leave home for the first time and go off to school. Besides worrying about who they will meet and what classes they will take and if they are eating right, most parents concern themselves with whether or not their child is ready to accept the financial responsibilities of being on their own. Because university is the first time for many young people to be out on their own, kids cannot handle the responsibility and will often end up spending well beyond their means.
University is a difficult time and a big transition for your children. They are not only learning to be on their own for the first time, but they have to handle heavier work loads then they are used to, as well as balance out their school time with the fun parts of being away from home for the first time. Because they will be socializing with peer groups from different financial backgrounds, it can be difficult for them to not give in to the peer pressures of their friends. There are many students who do not need to budget the same as your child does, so it can be difficult for them to avoid their friends' spending trends.
As parents, it is very important to make sure your child has a strong grasp on their own budget and in order to avoid huge student debts, you may want to help them draw out a financial plan. This plan should include text book costs, rent, food, school fees as well as money set aside for entertainment. Some parents may not consider this as an important part of your child's spending, but in order to avoid building up major debts;developing a budget that includes a portion for fun and entertainment will help your child understand the concept and responsibility. It will also make sure they understand how much financial importance should be allotted to different areas.
Another way to ensure your child is able to handle the responsibility of dealing with money while they are on their own for the first time is by giving them a credit card. If you let them get a credit card before they leave home, you can monitor how well they use it and help them understand the importance of paying off credit debt immediately.
Some people who are new to the idea of credit get into the habit of raking up huge debts. It is extremely important for your child to learn that by using a credit card, you have to pay interest. That means that a simple purchase can end up costing twice the amount if it is not paid off immediately. It is also a great way for your child to start establishing good credit so that they will be approved for loans down the line. In order to ensure your child's financial future is bright, strong financial habits are best developed early.
