By Jamie Bosse

You’ve kissed your little princess goodbye and sent her off to college this year.  She was top of her graduating class, a star athlete, and the smartest “kid” you know – you are so proud.  You’ve supported her financially for the last 18 years and now she’s out in the “real world.”  Here are a few financial pitfalls you should make her aware of before it’s too late:

  1. The Credit Card Trap

I signed up for my first credit card not because I needed or wanted one, but because if I did, they would give me a free t-shirt that said “College” on it.  A credit card for a t-shirt – heck of a deal!  I signed up for a second one because a friend of mine was doing a fundraiser for his fraternity and just needed to get a certain number of people signed up.  When I hesitated, he said, “You don’t actually have to use it, so what’s the big deal?”  Here’s the big deal – putting credit in the hands of an 18-year old with limited income sources can be a disaster.  Yes, it is possible that the card will be used responsibly and help build credit history.  The more likely scenario is that your student will use the credit card to supplement their income when they don’t have the money to buy a new outfit for the weekend or book that spring break trip to Cancun.  Educate your kids on credit cards, interest rates, and how they work.  Encourage them to talk to you about it.

  1. Financial “Independence”

Many high school grads have never managed their money on their own before.  They may not know how to make their student loan or scholarship money last a full semester or how to make their “allowance” last a full week or month.  If they’ve never had to pay their own bills before, they may not remember when they are due or how to balance their expenses.  You and your child will likely experience some trial and error here.  If you have to bail them out once or twice, fine, but make sure you are taking advantage of a learning opportunity.  If they keep getting in trouble with cash flow, try letting the natural consequences happen, even if they “fail” and suffer a bit.  You don’t want to be supplementing their income well into their 40’s!  Teach them good money management habits now.

  1. The Monthly Burn Rate

Work with your student to figure out how much they need each month for rent, bills, meal plans, fraternity or sorority dues, entertainment, etc.  Show them how much “fun money” they have each month after all the bills are paid so they know that they cannot exceed that amount.  Help them create a schedule or reminders for when all their fixed bills are due so that they have money available when they need it.

  1. Student Loans are no Joke

Loans are not free!  If your student qualifies for assistance, they may actually be offered large sums each semester.  Make sure you review their expenses with them and help them decide how much aid they actually need.  Loans do have to be paid back at some point and student loans aren’t even forgiven in bankruptcy.  Encourage your child to look beyond just school.  What is their major and what kind of career will they have?  How much income will they generate?  Will they be able to afford making student loan payments once they graduate?  Graduating with $30k in debt and not making even that much in salary per year is a bad place to start.

If they aren’t making prudent decisions now, your student could be setting themselves up to be eating Ramen noodles and driving a used clunker well beyond their college years.  Communicate often and help them navigate these common financial pitfalls so that they can start their “adult life” on the right foot.  If you’ve ever struggled making up for a bad financial decision, you know how money management can affect your quality of life.

For questions about a specific college situation you may be struggling with, schedule a meeting by clicking below, contact Jamie Bosse –, or call (913) 345-1881.