Best Steps to Prepare Child Financially Fit Before Colleges
As a parent, you can train your child for what needs to be done and not for college. Usually with whom you make friends and what kind of people you avoid. However, many parents ignore the important quality of university life: teaching their children how to handle money properly and the importance of it. Therefore, it is important that you secure your child’s financial status before college.
Here are the best steps that can help your child adjust finances before starting to teach (Get child Financially Fit before joining colleges).
The importance of financial fitness
Youth around the world are vulnerable to excessive costs. In college, they get new interests and hobbies that often squeeze their pockets. They might also spend money on wasted activities and wasting time. That’s why you can do something here.
Help your child open a bank account
That might sound trivial. However, this is the first and most important step in ensuring your child’s financial status before college.
A personal bank account helps your child understand various banking functions such as deposits and withdrawals, interest rates, various services that can be used free of charge for payments, as well as the use of ATMs and checks.
Currently, most banks have special student accounts with benefits such as opening a zero account, without the need for a minimum balance, higher interest rates and sometimes some free accounts.
Look for a good bank or credit union that offers a special savings account for students.
How to make a personal budget?
Another very important step is to teach your child who is tied to university how to set a personal budget. Here it is important to reconcile all needs and desires. Obviously, a teenager in college will develop new tastes and get new tastes and habits. At the same time, it is important to avoid excessive spending.
At the same time, it is also necessary to prevent malnutrition, because this can rob a child of the pleasure of university life. Saving money where it is not needed also has dire consequences. Your child may develop low self-esteem and lose interest in college life. Help your child develop a budget that is almost smart. Show them how to use a good budget application.
Promote profits and training
The myth that working as a student only applies to families with a lack of money is open. In fact, making money during college has great benefits for your child. This helps them learn the value of time and money.
A winning student is able to cover at least a portion of the costs associated with college, such as vacations and buying “wishes”. Encourage your child to accept online college work and pay a portion of their income. However, spend only a portion of your income on bills or purchases, as long as the rest goes to your personal bank account as savings.
One of the biggest expenses your child may receive from income is installment loan interest payments. There is good reason to suggest this, and we will discuss it in the article.
Get a student credit card
Usually, every major bank has a special credit card for students: this is a system that is widely used throughout the world. Get your child a student credit card.
Understandably, your spouse or you must sign your credit card application. Parents are responsible for the fees their children charge on student credit cards. Instruct your child to pay all credit card fees on time to avoid increasing interest rates or annual interest rates.
Having a credit card payment history on time helps build a good credit position that is very important for the future. Unfortunately, most students leave college for unpaid credit card fees and educational loans with very bad credit.
Discuss educational loans
Higher education is so expensive anywhere in the world. Therefore, most teenagers are forced to choose student loans or educational loans, as is known. Usually, most students wait until they have completed their studies and are looking for work to pay for student loans. This can be a big mistake.
On one hand, educational loans also inspire student credit worthiness. Therefore, paying credit card fees and university loan rates while studying is a great way to start a career with a high credit score. Discuss educational loans and why you should discuss with your child. Stress the importance of early repayment and a solid credit rating.
Talk about investment
Talking with a teenager who studies investment can be difficult. However, it is a good way to prepare your child for the future if you do not invest some or all of your savings in addition to or in college.
There is a common misconception that investing means a large amount of money. No it’s not that. Applications in the US allow users to invest as little as $ 5. In India, it is possible to invest as low as Rs. This is not a significant number for working students. The benefits for your child are huge and incomparable.
They are introduced to financial markets, investment plans and how various savings plans work. These important skills teach them how important money is and how it is used for adults today and in the future.
Teaching Net Banking etc.
While money is still royal, it may soon lose land: transactions without cash grow at an annual rate of 12.7%.
The trend will continue and grow. The 2018 Global Payments Report issued by BNP Paribas and Capgemini shows that the number of non-monetary transactions in the 2019 financial year was 671.7 billion worldwide.
In 2021 it will be 876.4 billion. Therefore, it is important for your child to understand cash transactions or digital banking. In addition, digital transactions are faster and cheaper. For example, some banks charge fees for using their cards at other banks’ ATMs. Some problems are checked for a small fee.
Digital transactions are usually free and therefore your child also saves money. This resolves the problem of depositing checks at certain cash payment points. Digital payment systems generate physically excessive money. For transfers and investments, many applications are available.
Explain the bill
Money etiquette? You might not know this term. I will explain that money etiquette is related to how someone behaves in money matters with other people.
Here’s a polite way of refusing credit or dividing bills. Learning the ethics of money can save your child from a lot of sadness in college.
There are definitely fees for applications that require small loans, situations where the distribution of bills is very important and where your child might not have money.
Knowing how to deal with difficult situations like that is the ethics of money. Almost everyone becomes anxious when talking about money or money problems. This is where etiquette for good money for your college kids is useful when dealing with difficult topics that attract other students.
Epilogue of financial status
The campus financial capacity has lifelong implications. Therefore, it is important to ensure the financial status of your child before college. Financial fitness also helps your child make easy monetary decisions and develop much-needed financial discipline.
Every teenager wants to try new things and need money. And they get new friends who enjoy campus life. Whether your child lives in a dormitory or traveling home is not important for your financial fitness. This is a basic skill that is best learned at a young age. So trying to reach your child’s financial status before college is one of the best investments you can make.
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Nanthakumar R, a zeal freelancer who is passionate about Mechanical Design, Drafting, Blogging, Belles lettres and epistle hunting.
“live and let live”.