Six things students need to know – Financial Planning for college students
This past Spring, I was honored to have Dr. Ed Schrader ask me to get involved with the student body at Brenau by teaching a financial class to a group of Freshman students. This year Brenau has added a requirement that all Freshman students take two out of eight life-skill classes and one of the classes was my class – financial planning for college students.
When I thought about the content of the class I thought about what do college students need to know to make good financial decisions and what do I do everyday for my clients that I can pass on to these college students?
I came up with six things for the students to know about or do while they are in college. While discussing the six topics I also talked about the importance of financial independence and being able to make financial decisions for themselves. I also asked them to write down two financial goals for themselves and to write down a plan to achieve those goals. I thought it was important that they walk away with two ways to financially better themselves. If you have kids/grandkids in college or kids/grandkids that are about to go to college maybe these tips will help them.
The six topics I discussed are below:
Set a budget: So, why set a budget at age 18 years old? My emphasis to them was to learn what a budget is, why it’s important and figure out how to live by one at this age. I told them that there are people double their age that has never lived on a budget or know how to set one up. Learning about budgeting early will make things a lot easier after graduation when you are living on your own and dealing with adult household expenses. I gave each student a sample budget (designed for college students) along with the same worksheet for them to complete on their own.
Get a bank account: I asked the students who had a bank account in the class and the majority of them had one, but how about two accounts? Not as many hands went up. I talked to them about having a checking account and a savings account. I also talked to them about doing their research on banks; don’t just pick one because your parents use the same bank. Do the research yourself: What are the fees? What are the minimum balance requirements? Where are the branches and ATMs? What bank is the best bank that fits your lifestyle?
Start a savings plan: When I talked about this subject I told them I know this seems far fetched, but it’s not. Come up with a plan to save a little bit of money every month or every week. Why? I talked about emergencies coming up, where are you going to the get money? If you have your own savings, you get to make your own decisions, you also get to be independent. Having your own money allows you to make your own financial decisions and is a step closer to independence.
Earn your own income: Another way to be independent and to jump start that savings account. I not only talked about the financial benefits, but also the benefit of meeting people outside your normal circle, learning how to work with a boss that you may or may not get along with plus, this is an opportunity to learn firsthand about an industry you may be interested in.
Avoid credit card debt: I talked about “good” debt versus “bad” debt. I also talked about what a financial stress credit card debt can have on your life especially when you get out of college. I showed them a YouTube video of a young woman who graduated from college with credit card debt and how it’s effecting her life as a young adult. Click here to see the video (it’s only about 3 minutes long): https://www.youtube.com/watch?v=7U6pmkTC8i0
Set Financial Goals: I focused a good bit of time on this topic because I wanted them to start thinking about setting goals for themselves and how to actually meet their goals. I talked about how easy it was to set goals, but developing a plan and sticking to the plan was the hard part. I asked them to each come up with a financial goal to achieve by the end of their freshman year with a plan to get there and I asked them to come up with a financial goal by graduation and a plan to get there. I then asked them to group up with some other students in the class and discuss their goals together and then I asked each of the groups to nominate a person to present the most widely discussed goals. The goals that stood out the most were:
- Work hard to keep their current scholarship
- Stop using a credit card
- Start saving every month in their savings account
I hope this class was informative and that some of the info sank in plus I hope the students are working towards the financial goals they set for themselves.
I enjoyed teaching the class and honestly, it was out of the box for me and I took this assignment very seriously. I hope to do it again and most of all I hope the students attending the class got something out of it. If anyone wants the full PowerPoint I’m happy to send it your way.
CERTIFIED FINANCIAL PLANNER™
Partner, Windsor Wealth