As summer comes to a close, many parents and teenagers are packing up the station wagon (or hybrid crossover) for a trip that, for at least one passenger, is one way. You’re ready for this. You’ve done the shopping trips, you’ve packed the boxes, you’ve even shed a few tears. Now it’s time to send your child(ren) off to college.

As the apron strings loosen, the purse strings will loosen as well. Your new college student will find themselves making real-world financial decisions for the first time.

Here are a few financial lessons your new college students need to hear as they cross the threshold into adulthood.

1. You are an Adult Now

Becoming an adult is full of adventures and new opportunity, as well as challenges kids have never faced before. Now that they are legal adults, your kids can get a tattoo, sign a lease on an apartment or car, take a cruise around the world or open bank accounts without needing your approval.

You won’t be there to pick them up when they fall – whether it’s a scraped knee or an overdue Mastercard bill. They’ve reached an age of immense freedom, but with responsibility close on its heels.

2. Student Loans are Not Free Money

If you’re a parent of a young adult, you might have relatively recent memories of that student loan disbursement check that came every semester. The more sober-minded among us took that “leftover” after-tuition cash and put it toward books and rent. The rest of us went shopping.

Even more fresh in your memory than student loan checks are probably those student loan bills that started flowing in soon after you left school. The average American student graduates with student loans in excess of $37,000. What might seem like “fun money” in the moment will show its reality soon enough.

3. Credit Cards can be Dangerous

If you went to college, you probably remember the credit card vendor sitting in the commons with a table full of t-shirts and Koosh balls, trying to get students to sign up in exchange for a “free gift.” Laws have changed as of 2009, curbing this aggressive on-campus marketing, but it’s still possible for your students to get their hands on an overly “generous” line of credit.

Unlike student loans, credit card companies won’t wait until your student graduates to come calling for payment. That bill will come. Neither rain nor snow nor sleet nor anything really, will keep that bill from showing up in their tiny student post office mailbox every month.

Tell your students about the importance of maintaining a good credit score. Although it may seem easy to ignore those bills in the moment, there’s a paper trail behind it that can impact their life for years to come. For people who have never paid very many of their own bills before, the reality of debt and credit scores – or, heaven forbid, collections – can be a tough lesson.

4. A Good Budget will take You Places

“If you know how to spend less than you get, you have the philosopher’s stone.” – Ben Franklin

Learning to build a practical budget is one of those lessons that will serve your children for the rest of their lives, long after they’ve forgotten most of what they learned in college. Stickingto the budget they’ve set up may take another couple decades to learn, but it will be worth it.

Luckily, the practice of personal budgeting has gone digital, which is the language most young adults speak. Apps like Dollarbird, Personal Finance and Fudget can help them track and plan spending on the go, rather than scratching their heads and wondering where their money went. A simple monthly budget is an invaluable discipline for the rest of life, and the freedom and newness of college is the time to get started.

A Word for Mom and Dad

Sending your child off to college is a whirlwind of applications, financial documents and trips to Super Target. This might be one of the last times you’ll be in charge of the details for your young man or woman, so here are a couple housekeeping items to keep in mind.

• If you’re helping your student pay for college, they need to authorize you to access their tuition information. Contact your child’s college business office for more details.
• You no longer get to make healthcare decisions for your child once they hit 18, so get your student to sign a durable healthcare power of attorney with your name on it in case an emergency occurs and they can’t make decisions for themselves. States vary in the details on these documents, so make sure you are filling out the most updated and appropriate documents for where you are.

There They Go

This is a threshold for not only your child, but yourself. They may not realize that, but the reality of it will be vivid for you on an emotional, relational and definitely a financial level. You can never be fully ready to let go, of course, but minding these details can help you help them.

As is the case with any financial life transition, speaking with a qualified advisor can help you see blind spots and plan for the sharp turns ahead when it comes to financial lessons for college kids. We offer you qualified, holistic advice today for the changes to come tomorrow.

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