Sunday, January 22, 2012

Successful Money Managers Equals Successful College Students

One of the many skills that adolescents need to take with them to college is how to manage money. Young adults who know how to budget, save, prioritize, and keep track of their spending is more likely to make them successful college experience. Teach these skills, however, can be difficult for many parents because so many adults are not good money managers themselves.

It's never too early to start training children about money, and perhaps train themselves in the process. Parents can begin teaching children as young as four or five to the budget during the holidays or during a trip to your favorite stores. As people age, parents can insist that part of their pocket money went into savings, some for charity, and the rest of discretionary spending for children. By the time children reach adolescence, one of the best tools for teaching money management is to put teens on a budget. First decide who will pay for what-school clothing, sports apparel, footwear, clothing, winter jackets, entertainment, cosmetics, eating out with friends, etc. Once you decide what you would pay, the average price of research. In your opinion, what makes sense to pay for jeans? For T-shirt? For running shoes? For flip-flops? Based on your research, come up with a monthly figure you think is fair.

It takes training, time, and repetition to teach children how to budget, handle credit, understanding a bank account, etc. Have your teenager sit down with you when you pay your monthly household bills. Show him the details: mortgage or rent, utilities, garbage collection, the cost of cable and internet, landline and cellular phone costs, medical costs, etc. Show your teenager gas and grocery receipts to see how much that needs charged every month. The summit is to pull out your credit card bills. Would you pay this every month or only partially, have your teen calculate the interest and late-payment penalties. Credit card charges are usually open their eyes.

If parents can do this when they were teenagers living at home, it will be a smoother transition when teenagers go on to college or whatever he was doing after high school. The students who already understand what he was responsible for the costs likely to be successful in managing their college budgets.

Then consider following the direction of Laura Crowley, a math teacher at John Burroughs School in St. Louis, Missouri. Crowley has students choose a college of their choice and determine the real cost of attending: tuition, room and board, books, transportation costs, recreation expenses, and everything else of haircuts for football tickets. Crowley has the students use the "last to predict the growth rate of tuition increase for each year that they would in college." Total shocks are usually students.

No comments:

Post a Comment