Shipping kids off on their own: the day many parents love and loathe, both counting the days to and reminiscing about how fast it all went. Since money management is a huge part of flying solo we’ve shared a few thoughts to consider when you pass along your precautionary words of wisdom:
Be credit conscious: Many young adults away from home and in charge of their financial lives for the first time may get sucked in by the lure of quick and easy purchasing with credit. Make sure you stress that plastic doesn’t equal cash in the bank —but rather the opposite! If they already have a credit card encourage them to keep it at home, to be used for emergencies only. Even credit with a relatively low limit can take years to pay off, between the interest and if only minimum payments are made.
Figure out the real deals: It’s never too soon to teach the importance of price comparison, coupon saving, and evaluating whether or not something is actually a deal, especially if it’s not a necessity. Unfortunately, a tempting sale sign won’t make a “want” a “need” and $200 shoes offered at half price still result in $100 spent.
Get creative with it: No money for a gym membership? Try walks around campus. Textbooks breaking the bank? Get ‘em used. Need an occasional set of wheels? Try a ride-share program or Zipcar rental. Your imagination is the limit when it comes to finding creative ways to conserve cash. For students, in particular, there is a huge variety of free resources.
Learn from mistakes: If you’re asked repeatedly to shell out for necessities because Little Bobby or Suzie has spent too much on nights out, swanky electronics or the like, sit down and have a heart-to-heart about budgeting and some clear repercussions before handing over the cash (if you’re inclined to do so). Parents who continually provide a financial parachute may be helping in the short term but good money management skills will take a lot longer to develop.
Before taping up that last moving box and asking for promises of weekly visits (at least for laundry), set aside some time for a money chat. While the thought of financially weaning kids causes anxiety for some parents, try to remember that in the long run you’ll all be the better for it. Parents who are overly accommodating in the early years risk becoming a burden to dependent children in the later ones, especially if funds earmarked for retirement have been spent along the way.