Budgeting is one of, if not the most important life skill one can learn. As they grow up, you may have been able to teach them valuable budgeting and saving skills, but when they leave home for the first time, often to go to college, it’s time to put that teaching to the test. With the freedom of living away from home comes the responsibility to take care of themselves, including their financial health.
So, make sure you remind them of important budgeting tips so they don’t find themselves in patterns of overspending that can affect them in college and beyond.
Remind them that needs are different from wants. They’re old enough to decide on what's a need and want, but make sure you relay the consequences of mistaking a want for a need. When they’re on their own, they may not have immediate help if they’re short on money to pay for a need.
Your kid or grandkid may also pursue an on- or off-campus job. Earning their own money is a great way for them to learn what it’s like to earn their way in the world and to develop a sense of ownership and protection of what they’ve earned.
Before they leave, help them set savings goals and help provide them with a place to save or invest. While there’s value to jumping into the deep end, something as important (and as complex for an eighteen-year-old) as saving and investing in their future should be taught with care to ensure it’s as easy as possible for them to practice good financial habits.
Also, expect and leave room for mistakes. College is a time for learning in all regards. Make sure you’re as prepared as possible when they make a mistake or need help. Their missteps now will be the building blocks for their growth and success in the future.
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