Check out these four tricks used to get you to spend more (without you knowing it).
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Studies show that college grads are putting off marriage, children and home ownership due to the financial burden of paying back their portion of the country’s more than $1 trillion in outstanding student loan debt.
In other words, America’s 20-somethings are financially stuck in the mud.
So how can you keep your teen away from this unfortunate statistic? Here are seven practical tips to guide them toward a much brighter financial future.
Before They Take Off
1. Talk about the budget.
This is the first step in any money discussion—whether you’re shopping for clothes or shopping for colleges. Your kids won’t know where to apply if they don’t know how much they can afford. If you haven’t been able to save much, that’s okay. It’s not your job to fully fund your child’s education. It is your job, however, to be upfront about money so your child can set realistic expectations.
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2. Apply for tons of scholarships.
The average undergrad leaves school with a hefty $29,000 in student loans. That’s why it’s so important to help your kids figure out other ways to pay before they go. The obvious—and best—way is scholarships. So make sure your kids actually apply! Even if they just fill out one application per day, that could mean the difference between a full-ride and an empty bank account. For some extra inspiration, check out Confessions of a Scholarship Winner by Kristina Ellis.
Speaking of scholarships, have you heard about our $53,000 Financial Literacy Challenge for high school students? The Challenge, sponsored by Fifth Third Bank, runs April 7–24 in honor of Financial Literacy Month, and we have some great prizes. Underclassmen can enter for a chance to win one of three Chromebook 2 laptops. And this is huge—three seniors will each win college scholarships! We’re giving away a $2,500 scholarship, a $5,000 scholarship and a $36,000 college scholarship! That’s $36,000 for college to anywhere the winner wants to attend! To enter, have your student go to 53schools.com and complete our online money quiz for your student’s chance to win.
3. Get a job.
It won’t hurt your student to get a part-time job if there’s still a gap after scholarships. In fact, studies show that students who work 10–19 hours a week actually have higher GPAs on average than their nonworking peers. So don’t buy into the lie that loans are the only way to be a student these days. The truth is that a little hard work can really pay off.
4. Consider in-state options.
If the budget is still tight after merit awards and extra income, help narrow your student’s focus to state schools, which cost a fraction of their private or out-of-state counterparts. And if your teen isn’t sure about a major yet, community colleges are perfect for those first years of general education. Then, as they live at home and save up, your student can sock away cash for that higher-priced dream school.
After They Land
5. Take a financial literacy course.
The number one reason students drop out of school is money problems. So after your son or daughter selects his or her coursework, encourage them to sign up for a personal finance class, like Dave Ramsey’s Foundations in Personal Finance: College Edition, which is used on more than 450 college campuses nationwide. Even if it’s not required as part of your child’s Fashion Merchandising or Pre-Engineering major, it’s still a great investment because it will impact how they budget, save and spend their future incomes.
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6. Stay away from credit cards.
It may not be surprising to learn that 68% of students charged items to a credit card knowing they couldn’t pay their bills. So if you notice a pattern of constant dining out or a steady stream of new outfits, talk to your student. If they’ve fallen into the trap of credit card offers, tell them to give back the free T-shirt, cut up the cards, and get on a budget—pronto!
7. Graduate on time!
Only 59% of students at four-year universities graduate within six years. That means tens of thousands of extra dollars for these students and their parents. Make sure your student graduates on time by encouraging them to take a full course load each semester and stick to their chosen major.
By the way, it’s okay to guide them toward a major that will both align with their passions and allow them to buy groceries later on.
College doesn’t have to bankrupt you or your student. So don’t borrow a single cent in the name of “good parenting.” You’re already a good parent. As long as you’re willing to be open and your child is willing to do the work, there’s no reason either of you should get stuck with student loans.
Don’t forget about the $53,000 Financial Literacy Challenge for high school students! Learn more about how your student can win a scholarship or Toshiba Chromebook!