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30+ Ways Your College Student Can Earn Money This SummerSuzanne Shaffer
Money can be a tricky topic to raise with a newly-minted college graduate but there are few subjects more important. If you haven’t had “the talk” about budgets, saving and financial planning before graduation day, you’ll want to bring it up soon.
Where do you start? In the car or plane on the way home after the festivities are over and the dorm room is packed up? Sure, you’ll have a captive audience, but it’s probably best to pick a less fraught moment.
Prepare for the conversation by doing some homework of your own. Of course, there’s an app for that — any number can help your grad make a spending plan, track expenses, keep their finances in the black, and start good habits where spending and saving are concerned. Check out a few of the available options: Mint, Budgt, Toshl Finance, iXpenseIt and Buxfer. You’ll see how easily these apps create a spending plan (sounds so much better than “budget,” but it’s the same thing), and track where the money from that (fingers crossed) first job of theirs will go. The graphics are clear, and will help anyone see the big picture.
Let’s say your grad has lined up a job already. Celebrate first, and then test the waters for how much information they feel comfortable sharing with you about insurance plans, 401Ks or IRAs. It hardly seems fair to start talking about retirement to young people with brand-new diplomas, but no one regrets starting this kind of planning early. It’s important for them to understand the compensation and benefits package before they sign on the dotted line. Time is on their side. All the early contributions and investments the new grads make will add up over the years — it’s the power of compounding growth.
Even when you find a good time to talk, when you think your grad will be receptive, realize that your good advice may not sink in immediately. Be patient. Some lessons take a while to learn.
While we certainly hope our new grads march off into a future bright with promise, we also want them to be prepared for the unpredictable: this includes maintaining renters’ insurance, health insurance and auto insurance. We also want them to be wary of stocking up on those credit cards that are dangled temptingly in front of them, both on and off campus. Do they know they will be establishing a credit history? This kind of history can influence the future, so make sure your grad knows where to go to periodically check on this: www.annualcreditreport.com.
You never know — your recent graduate may surprise you with their financial acumen, so give them a chance to demonstrate their handle on these matters before you jump in. To their credit, my grown kids are much savvier about planning for the future than I ever was! They’re saving for retirement, and for college for their kids — and so the cycle continues.
Is it too soon for them to consult with a financial advisor who has their long-term interests in mind? Probably not, especially if there are student loans to pay off or consolidate.
Many money experts recommend sharing what you feel is appropriate about your own finances, retirement plans and estate documents. This could be a good teachable moment for how to make decisions about money and investments: when to purchase a big-ticket item, when and why to wait, and what kind of considerations go into making these decisions. If your college grad is interested in getting some real-world experience, invite them to participate in the discussion as you weigh the pros and cons. You may find you’re relieved to have them in the know about how these things work in your family. If you have a budgeting system that works for you, break it down and share it.
Finally, when the nest is empty, and the fledglings are on their own financially, think about how to shift your focus away from paying tuition...and toward your own retirement!
With thanks to Nancy Tredwell and colleagues at Bedell Frazier Investment Counselling LLC. Looking for more great financial tips? Read — and share — Judy' McNary's "Advice on saving for new college graduates."
It’s time to celebrate with the perfect gift for your new grad!