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Tips for Parents of College-Bound Students
High-school students bound for college will embark on many new experiences--including financial independence. Here are some tips for parents to help kids prepare for what's in store.
Explain how credit works
If your son applies for a credit card at a campus table promotion, he'll not only take home a free T-shirt, but a credit line he may not be able to afford, and may not know how to manage. A credit card is not free money; it's insteada means of putting off paying for purchases until a later date. Accompany him to the credit union for the best rates on credit cards and consider urging him to use a debit card instead.
Create a spending plan.
Write down all college expenses such as tuition, books, room and board, toiletries, entertainment, and so forth. Determine which expenses you'll bepaying and those for which your child will be paying.
Come to a no-bail-out agreement.
If your daughter ends up charging more than she can afford, or runs out of money before the end of the month, your first reaction may be to send money and bail her out. Don't do it. If she needs to figure out a way to get out of debt, such as working or staying home on weekends, chances are good she won't make the same mistake twice.