Personal Finance 

How To Financially Prepare Your Kids For College

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When I went to college, all I took with me financially was $500 and a laminated ID card from my local credit union. I had no idea what credit cards were, I didn’t really understand the idea behind loans other than the fact that I had the maximum of Stafford Loans, but I did know I’d be perfectly alright because my room and board were taken care of. I had a meal plan with the school and I had all the “stuff” I really needed (clothes, books, computer, etc.) so I was well prepared for school. While I wasn’t poor, not any more poor than your average college student, my resources were just scarce and scarcity educates like no other.

That’s the mentality you have to take when you’re thinking about what tools to give to your kids when they go off to college. Some articles will recommend that you get them a credit card or that you open up a bank account in their town that can link to yours; while all of that is great and good, ultimately you need to make sure they keep that “poor student” attitude so that they can learn how to be financially stable while gaining their independence.

As funny as it may sound, the biggest “shock” of college, besides the loss of your parents as a security blanket, is that laundry costs money. I mean besides having to buy the detergent (and dryer sheets if you were living the high life in college), you actually had to pay a couple dollars for each wash and dry. When you go to school with a few hundred dollars, you soon realize that you have to budget for laundry or you’re going to smell something fierce near the next “payday,” when I went home. Again, scarcity meant I was aware of how much I had and that I needed to plan for the future. I didn’t have a credit card at the time so I couldn’t spend more than $500 before I went home, so I didn’t… in fact I probably went home with $300 in my pocket (it isn’t a Hurculean task to only spend $200 between the end of August and Thanksgiving when your room and board is already taken care of and you don’t have a car or bus pass to get you around town, but i’ll take the pat on the back anyway :)).

Scarcity also creates a drive inside you to work as hard as you can and as smart as you can to be successful. Successful simply means money, let’s be honest, and with money comes the ability to support your family, which is what it’s all about. Many of life’s success stories were born out of scarcity (think Chris Gardner, whose life was dramatized Pursuit of Happyness) and a drive to improve your condition, introducing that to a college student, even if money isn’t hard to come by in your family, is not a bad thing. Not at all. My dad came to the United States with a one-way ticket from Taiwan and a student visa, that’s scarcity. Twenty years later his son goes to a school that cost close to $30,000 a year with $500 cash in his pocket, that’s not scarcity… that’s an educated decision and one I’m glad he made.

{ 7 comments, please add your thoughts now! }

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7 Responses to “How To Financially Prepare Your Kids For College”

  1. Pinyo says:

    This is a nice story. Sounds like you were very responsible with money. My parents were very kind and I had to learn the credit card lesson the hard way.

    I had to do my own laundry since 12 at the laundromat, so laundry was not a shock. What shocked me was the pace that the professor take the class through each lesson. It was completely different from NYC public school.

  2. jim says:

    Well, laundry was the biggest financial eye opener I should say… that and tuition.

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  4. Madame X says:

    Interesting way of looking at it– it’s true that in college many kids have the basic needs of food and shelter taken care of, and it’s a chance to be forced to live minimally beyond that. But I guess for other students, there can be a lot of extra expenses. Textbooks are expensive, and I also had to buy a lot of art supplies, which could add up to a huge amount of money. I remember having a heart attack when I discovered that a required box of colored paper cost $40, which was pretty significant to a college student like me 20 years ago!

  5. Sam Smith says:

    Excellent article! I think you illustrated the way that a deficiency in something can cause people to strive to better some part of their lives.
    I’ll be moving to my first semester of college in a few days, and up until a few months ago, I didn’t realize how financially “anemic” I was. I think that, along with providing financially for your kid’s education, parents should also make sure that their children are educated in the ways of personal finance. In the end, I think this education could keep a lot of people out of debt and with a little more $ in the bank.

  6. I don’t remember it being a shock that laundry cost money – I do remember being annoyed at how many quarters it took!

    I wish I had been a lot more aware of money management back then. I wasn’t irresponsible by any means, but I didn’t have any real “smarts” either.

  7. princess says:

    I am a stay at home mom .i have a four year old little babyfother work .i am unenployed but I started to put money aside for my little girl future. you can say I am poor but not durt poor .i am putti.g money aside now for my baby so she wont struggle about money .i will be shore money wont be a problem for my little girl..i will teach her how to invest in her own bissness.when she go to grade school.i will land a good job .and open up a couble of trust funs for when she gets in her early 20she will own her house and be already invest in her own little girl wont know what stuggles is.because she will already have eveything set out for will be no problem to come by for my baby my grandkides will be fine.

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