By Donna Skeels Cygan, Expert Financial Advisor
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Today’s retirees are living longer than ever, and many worry about outliving their assets. |
If your teenager will be heading off to college, he or she will be facing a lot of potential financial pitfalls — and financial advisor Donna Skeels Cygan says you should make time to talk about the following seven things with your teenager before classes start:
Be sure your child knows what this is costing. (And make her commit to finishing in four years.) College is a time to focus on learning and earning a degree.
Involve your student in the financial aid process. Make sure your student is knowledgeable about merit-based scholarships, need-based aid, grants, or work-study.
Help your child work out a monthly budget. This might include paying for food, transportation, entertainment, laundry, clothing, and more.
Talk about how to resist financial peer pressure. Making a deliberate commitment to living within her means will save her (and you!) a lot of stress.
Beware of plastic! Encourage her to think long and hard (and talk to you!) before signing up for a credit card.
Encourage your student to start a savings program. Whether you’ll be providing your student with an allowance or she’ll have a part-time job (or a combination of both), save some of that money if your student’s budget allows.
Specifically, talk to her about opening a Roth IRA. The Roth IRA is a great way to save for a down payment for a home or to help pay for graduate school. See your tax advisor or www.irs.gov for details. HBM
Donna Skeels Cygan is the owner of a successful financial advisory firm and is the author of The Joy of Financial Security: The art and science of becoming happier, managing your money wisely, and creating a secure financial future (Sage Future Press, 2013, ISBN: 978-0-989-77844-2, $24.95, www.joyoffinancialsecurity.com).
