7 Tips to Transform Students Into Financially Responsible Adults
These are some simple ideas that most students are capable of handling. Lessons learned, like buying a house, will be applied countless times in a studentís life, and it is better to learn them now. These teachings will help them to get ahead when the
Yes, it is possible for your student to learn some valuable life lessons while they are away at college. Not all of them may be a possibility for your family, depending on financial ability, but it may be valuable to consider the options. Many things are possible, even though they sound out of reach.
What your student can do to learn some financial lessons:
1. Buy a house. With todayís low interest rates and interest-only loans, anyone with descent credit can buy a home with no money down. Sellers can pay closing costs, usually up to 6% of the loan amount. Roommates can help to split the mortgage payment, allowing it to pay for itself. Over the four years, or so, that your student is at college, thousands of dollars will be earned in equity for them to use on the purchase of their next home. At a modest 5% annual property appreciation, a $150,000 home would be worth about $192,000 in five years, approximately the time it takes to graduate from college.
2. Open up a couple of credit cards. Good credit can be built by showing that your student knows how to manage money. By opening revolving lines of credit and paying the balances down monthly, it shows credit worthiness.
3. Open a checking account. Being able to balance a checkbook can be a difficult task for anybody. Checking accounts are also a great way to see where the money is going, and most importantly, what expenditures can be reduced, if not eliminated.
4. Pay their own tuition. Now, this doesnít have to be upfront. Loans can be taken out to pay for schooling, and almost anyone is approved. Interest and payments are deferred until usually a six month absence from school. The loans could probably be paid off with the proceeds from the sale of the home.
5. Get a job in their desired field. This mistake is made by many. Finding a job in the studentís desired field may not pay the best upfront, but it will open many doors for career opportunities. A network is built and experience is gained. Itís not what you know, but who you know, and this covers both.
6. Take advantage of 401k offered by employers. Many employers these days offer 401k plans to employees who work so many hours. Invest as much as possible in these plans. A couple percent may not make much difference on a paycheck, but it can make a huge difference in the growth of a fund. After five years at college, it may be possible for a student to accrue $10,000 or so.
7. Drive a beater. So many times we see students go out and buy a fancy new car that comes with a fancy new payment. Car payments can be upward of $500. Autos lose their value extremely fast and can result in negative equity faster than many other purchases. Driving a modest vehicle with a minimal or no payment will eliminate the stress of shifting funds around help to reduce other debt.
These are some simple ideas that most students are capable of handling. Lessons learned, like buying a house, will be applied countless times in a studentís life, and it is better to learn them now. These teachings will help them to get ahead when they step into the workforce and family life as they look to the future.
Robb Ksiazek is a successful author and publisher for http://www.checks-4u.com. He has researched and written hundreds of articles and can simplify your online search by recommending merchants for the best value and selections in business or personal checks, address labels, rubber stamps and envelopes.
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Name: Robb Ksiazek