Part of raising kids into responsible adults is to teach them about proper financial management. Big words though these might seem, the concept of personal financial management actually starts during childhood. Teaching your kids about the value of money and what to do with money is an important component of your children’s early formation. In their teenage years, you can already start them with the concept of saving first before spending.
With the allowance that you give them, they can work at budgeting and saving. You can already introduce them to the banking system by first opening a kiddy savings account and later on when they are old enough, a checking account. Allow them, with your supervision, to manage their own cash inflow and outflow. Make it a point to teach them to put their babysitting or dog walking money into their checking account. Before they go off to college, properly trained children would already have a good financial foundation to survive living on their own.
As your children move out of your home to go to college, the task of managing their finances will most probably take a toll on them. Not only do they have to worry about the money for their school fees, but they also have to worry about budgeting for board and lodging, food, transportation, and of course, entertainment. Just like many others, your child might already have a student loan for which he has repayments to think off.
And then, there is the temptation to spend for trivial things maybe to decorate their new pad, or maybe to get his own set of wheels that would turn heads for that “who’s that new cool kid?” factor. The strength of your child’s financial foundation will be challenged at this point. If you have a raised financially responsible child, this should not be a problem.
Just for emergencies or for other immediate needs, you can give your child a student credit card. What is the purpose of these plastic cards? As the name obviously indicates that are plastic cards especially developed for students. There is hardly anything by way of financial assistance that really takes care of all the needs of a college student. Student loans usually cover just the tuition fees. Other expenses like board and lodging, food, transportation, and other necessities are usually up to the student to cover.
As a parent, your inclination is towards making provisions for your child in case of emergency financial need. This is where student credit cards can prove to be useful. You can use student credit cards as an emergency tool for your child in case there is not enough cash on hand for his necessary purchases.
Remember, the student referred to here is one who is responsible for his personal finances. And so, worrying about the student overcharging or falling into debt might not be necessary at all. Keeping tabs on how your college student is handling his account would be a good way for you to ensure that he is on the right track. Understanding what is the purpose of student credit cards and sticking to only necessary spending is important if you want to use such a financial instrument as a financial lifeline for your college student.
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