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How To Financially Prepare Your Kids For College
Posted By Jim On 08/08/2007 @ 9:18 am In Personal Finance | 7 Comments
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.
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