“What Are Some Tips for My Col­lege-Aged Child?”

Northwest Arkansas Democrat-Gazette - - VOICES -

An­swer: When his daugh­ter was look­ing at col­leges, Dan Pre­bish, Di­rec­tor of Life Event Ser­vices at Wells Fargo Ad­vi­sors, ap­proached things a lit­tle dif­fer­ently than many par­ents. He raised the is­sue of col­lege fi­nances while on col­lege tours, ask­ing tour guides ques­tions such as, “How much do you bud­get for meals out­side of the dorm?” and “Where is the near­est ATM?”

Pre­bish found that sprin­kling in fi­nan­cial ques­tions pro­vided an op­por­tu­nity to get his daugh­ter think­ing about more than just the school’s cur­ricu­lum, sport­ing events, and Greek life. Din­ner con­ver­sa­tions about schools she was ap­ply­ing to of­ten fea­tured dis­cus­sions of schol­ar­ships. It was a strat­egy de­signed to help sen­si­tize his daugh­ter, Ly­dia, now 19 and a col­lege fresh­man, to man­ag­ing money.

Tracy Green, Tax and Fi­nan­cial Plan­ning spe­cial­ist at Wells Fargo Ad­vi­sors, says money man­age­ment is the most im­por­tant les­son you can teach your chil­dren, be­cause “they’ll need that in their col­lege years and be­yond.” Green, along with Pre­bish and his wife, Anne, share some tips for par­ents to help pre­pare their chil­dren for the chal­lenges that lie ahead when they’re liv­ing in­de­pen­dently as col­lege stu­dents.

Tip 1: Dis­cuss tu­ition and re­spon­si­bil­ity

Green says that be­fore even ap­ply­ing to col­lege, par­ents need to talk with their child about what type of school is within the par­ents’ bud­get and what por­tion, if any, the child will be re­spon­si­ble for cov­er­ing. “Ev­ery­one needs to know up front what they’re go­ing to be re­spon­si­ble for by the spring or sum­mer be­fore col­lege,” she says.

Ly­dia Pre­bish, for ex­am­ple, pays for her own en­ter­tain­ment ex­penses, such as movies or meals at a restau­rant with friends. She saved money from a sum­mer job and also works on cam­pus. “I think it’s al­ways valu­able for kids to have work skills, whether you need the money or not,” Dan says. The in­de­pen­dent source of in­come helps pro­vide stu­dents a sense of sat­is­fac­tion and self worth, he adds. Be­cause Ly­dia works two four-hour shifts a week, it’s man­age­able for her. But Dan says work­ing, es­pe­cially dur­ing the first se­mes­ter as a stu­dent ad­justs to col­lege, may not be ideal for ev­ery stu­dent. Those who want to par­tic­i­pate in many ex­tracur­ric­u­lar ac­tiv­i­ties or have a de­mand­ing cur­ricu­lum may find it more dif­fi­cult.

Tip 2: Fo­cus on bud­get fun­da­men­tals

Anne Pre­bish says your chil­dren should learn the core con­cept of money: un­der­stand how much money they have and know not to spend more than that. “We have to be care­ful not to as­sume our kids know these things,” she says. Both she and her hus­band say it makes sense for kids to have a job the sum­mer be­fore col­lege so they can ac­cu­mu­late sav­ings. But man­ag­ing that money dur­ing the course of a six-month se­mes­ter can be a chal­lenge. They sug­gest sit­ting down with your child and di­vid­ing the to­tal amount of money avail­able by the months at school to de­ter­mine a monthly bud­get. “The first se­mes­ter is about learn­ing and keep­ing track of how you’re spend­ing your money,” Anne says.

Tip 3: Think about debit and credit cards

The Pre­bishes and Green agree that a debit card is a key way to help stu­dents man­age money. Dan says it’s an easy way to pay for items such as books, while Green adds it has over­sight value — par­ents can limit spend­ing on the card to the check­ing ac­count bal­ance. She also sug­gests that par­ents get their child a se­cured credit card, where the par­ent fronts the cash de­posit but the child is fi­nan­cially re­spon­si­ble for mak­ing on-time pay­ments, as this is a way of help­ing the child estab­lish a credit his­tory with­out giv­ing him or her free rein over a tra­di­tional credit card.

Tip 4: Don’t for­get their health

Dan rec­om­mends ver­i­fy­ing in ad­vance what your in­sur­ance cov­ers while your chil­dren are at col­lege, specif­i­cally whether they’ll be cov­ered for vis­its to a clinic on cam­pus or whether the school re­quires that you pur­chase their health in­sur­ance. Make sure to sched­ule rou­tine med­i­cal or den­tal ap­point­ments dur­ing sum­mer or school breaks so that they don’t go by the way­side. And he says it’s es­sen­tial for a child to have his or her own durable power of at­tor­ney autho­riz­ing a par­ent to make fi­nan­cial or le­gal de­ci­sions if the child is in­ca­pac­i­tated. A durable power of at­tor­ney for health care is also rec­om­mended, since pro­fes­sion­als aren’t au­tho­rized to share med­i­cal in­for­ma­tion with par­ents with­out ex­plicit per­mis­sion if the child is 18 or over. He sug­gests scan­ning those doc­u­ments onto the child’s phone and keep­ing a copy for your­self, so the doc­u­ments are read­ily ac­ces­si­ble. Green adds that doc­tor’s phone num­bers and med­i­cal and in­sur­ance in­for­ma­tion should also be kept on the child’s phone.

Tip 5: Em­power your chil­dren to ask for help

One sug­ges­tion Anne con­sid­ers crit­i­cal is to send the mes­sage to your col­lege-aged chil­dren that just be­cause they are adults liv­ing on their own, ask­ing for a par­ent’s ad­vice isn’t a sign of weak­ness. “Part of be­ing an adult is re­al­iz­ing other peo­ple are there to help you,” she says. And par­ents shouldn’t think they’re hov­er­ing if they as­sist.

“We have con­sis­tently been there giv­ing our daugh­ter our two cents and also let­ting her make choices,” Anne says. Those dis­cus­sions on col­lege sur­vival skills have helped their daugh­ter tran­si­tion well to her new en­vi­ron­ment. “She was pre­pared for any­thing we could pre­pare her for,” she adds.

***

This ar­ti­cle was writ­ten by/for Wells Fargo Ad­vi­sors and pro­vided courtesy of Trey Cole­man, Fi­nan­cial Ad­vi­sor in Spring­dale AR at (479) 756-0600.

In­vest­ments in se­cu­ri­ties and in­sur­ance prod­ucts are: NOT FDIC-IN­SURED/NOT BANK-GUAR­AN­TEED/MAY LOSE VALUE

Wells Fargo Ad­vi­sors is a trade name used by Wells Fargo Clear­ing Ser­vices, LLC, Mem­ber SIPC, a reg­is­tered bro­ker-dealer and non-bank af­fil­i­ate of Wells Fargo & Com­pany.

© 2016 Wells Fargo Clear­ing Ser­vices, LLC. All rights re­served.

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