Managing Finances

Tips to Help Your College Student Save Money for the Future

 

By Lucy Wyndham

For parents and students alike, college is an expensive time in life. In fact, in the 2016-2017 school year, the average yearly cost for tuition and fees in the United States was $9,650 for in-state public college tuition, $24,930 for out-of-state public college tuition, and a whopping $33,480 for private colleges. These statistics don’t include room and boarding, books, or extracurricular activities. With so many expenses in a concentrated period of time, it can be a challenge for students to prioritize saving money.

Want to help your college student save money for the future? Here are 3 tips to consider.

Discuss the importance of saving for the future

Before your student saves his or her first dollar, it is crucial to have a conversation about the importance of saving money for the future. Help your son or daughter understand why saving now will help make the future easier. Major purchases (e.g. a car, a home) are closer than many college students believe. It also pays to start saving for retirement as early as possible, which adds yet another reason to save up. When you inform your children of the importance of saving for the not-so-distant future, you help motivate and encourage their efforts.

Encourage your student to put away extra cash from their current job

Does your child work part-time or full-time? More likely, he or she doesn’t rely on every paycheck to survive. While college students use funds from their jobs to pay for books and extracurricular expenses, many have disposable income from these jobs. Work with your college student to make a plan to put aside a fixed amount from every paycheck. Have your child set up a separate savings account, and if possible, have automatic deposits from each paycheck sent to this account.

Give your student ideas for earning a side income

Students have numerous ways to earn extra income in college these days. From filling out online surveys, to selling old clothes and books, college students can effortlessly make extra money. Explain how easy it is to make a side income from these channels, and encourage your college student to explore which options work best for him or her. Discuss how quickly these funds can add up when deposited with his or her current savings contributions.

The most important way you can set your college student up for financial success is to be a positive example in his or her life. Have regular, open conversations about financial issues. Be a resource for your child to answer important financial questions, and to give advice as appropriate. Make it a priority to help your college student save money for the future.


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