For the millions of parents who will send a son or daughter off to college, these are the main things on their checklist: making travel arrangements, picking meal plans and ordering linens and other items for the dorm. It’s important to know that most students who arrive at college lack a basic understanding of finances or even know who their financial institution is! Don’t assume that they know about banking basics before they leave or will learn these things in school. Make sure to take some time to really sit down together to have discussions about financial planning and expectations, budgets, and rules. Use this rundown to hit the major topics:
Checking Account Basics
Do they have their own checking account yet? Sit down and go through the different services affiliated with their account. Download the mobile app and show them how to view their balance, deposit checks with mobile deposit, and set up alerts if their balance gets too low. Talk to them about their debit card and how it differs from a credit card. It’s important for them to understand that just because the vendor approves a purchase, doesn’t mean their account has the funds, and this can cause them to overdraft on their account.
→ What to know about Overdrafting: It is important to know that gas stations and restaurants don’t hold the money from your purchases right away. Explain to your kids that just because the purchase was approved, doesn’t mean they have the money in their account. They can check their available balance within the mobile app while on the go. You may consider signing up for Overdraft Privilege which allows you to overdraw your account for a fee in order to pay a transaction. (See the Overdraft Protection tab on the Checking page of our website)
Give an overview of Budgeting
Sit with your kid with a pen and paper and model for them how to create a budget. What will the family pay for, and what do they have to pay for with their own money?
Establishing Credit Card Expectations
It’s good for college kids to apply for a starter card for emergencies when they head off to school, which also helps them establish their credit score from the get go. Make sure to sway them from signing up for too many for free stuff in a short amount of time which could hurt their credit. A good rule of thumb to explain to your kids is to never put more on a credit card than they can pay off that month. Its also important for parents to set financial boundaries when it comes to credit cards, like “do not use this for anything but…” This helps create financial rules and becomes an independent responsibility of the student.
Sending Money to Your College Student
The early morning scramble to give your child lunch money might be over now that he or she has moved on to college, but you’re likely still helping out with expenses. Whether they need money asap for a textbook or other emergency expenses, you won’t have to break a sweat with these P2P options:
→ Account to Account transfer: If you and your child have linked checking accounts, you can simply transfer money from one to the other using online banking or the mobile app.
→ Popmoney: Allows you to send money straight to their account through your mobile device. Internet-based transfers are far more secure and convenient than cash or checks — and faster, too, when time is of the essence. As your child heads to college, it’s wise to prepare for surprises.
The Convenience of the CO-OP
No matter where your child is heading, they should have access to their account and someone that they can go to for questions. Have them download the CO-OP Network locator app on their phone and look up the closest Shared Branches and CO-OP ATMs near the school. Explain to them that because they bank with the credit union, they have access to the largest network of free ATMs—over 30,000! So no matter where they end up for spring break or internships, their money goes with them.
Ultimately, it’s the students college experience and they have to own it. But if we can set them up with the knowledge before they leave, they’ll find that they have a good chance at success from the beginning.
Do you have questions or concerns about how to send your kids off to school with financial basics? Tell us in the comments.