How Your Student Can Use the Summer to Ensure Future Financial Success
By Christine Ascher, USC
As April comes to an end, if your student is like most college students, they are probably thinking a lot about their summer plans. After the chaos of a busy semester, they might be tempted to spend the next three months laying by the pool and relaxing.
However, the summer is a crucial time for your student to catch up on all the aspects of life that fall by the wayside during the school year, from their personal life to their financial situation.
According to a recent press release from the banking company Discover, summer is “a prime time to establish smart financial habits — such as budgeting and building a credit history — and set yourself up for financial success next school year and beyond.” By dedicating a bit of time to finances now, your student will be in a much better place moving forward.
The easiest way to start establishing good financial habits is to find a summer job. When your student starts working, they can “create a budget based on [their] income, what [they’ll] need to buy each month — such as gas and food — and how much [they’d] like to save during the summer.” By starting out a budgeting on a smaller scale with a summer job, your student will better understand how to allocate their money later on when they start working full-time.
Discover also suggests using a credit card in order to begin building up credit history. If your student uses their credit card and pays it off on time each month, they’ll be on their way to establishing a good credit score. A credit score tells lenders how reliable you are in repaying loans and will play a large role in your student’s applications for any future loans.
Help your student try to find a card that’s geared specifically towards college students; they often offer deals specifically tailored to student needs. For instance, the “Discover it chrome for Students card offers 2 percent cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and $20 cash back each school year your [student’s] GPA is 3.0 or higher for up to the next five years.” Look around before you settle on one credit card to ensure that your student is getting the best deal.
The more you teach your student to do now to establish good financial habits, the better off they’ll be in the future. Especially if they already have a summer job or paid internship set up, they should try to dedicate their summer to budgeting and building up their credit score — they’ll thank themselves in the future.