College Students and Money (4)

Now that you’ve paid the first semester’s tuition bill, you can sit back and breathe a sigh of relief, right? Brace yourself, you’re about to face the ultimate college financial crisis: sending an 18 year old off with a book of checks and access to credit. To avoid a call of "Help, I’ve fallen into credit card debt and can’t get out" don’t let your kids leave home without knowing the family’s financial "aid" policy.

Keep cash as the #1 method of spending. Kids should know how to write checks, save ATM receipts and balance their accounts before they leave home. Those who know how to manage a cash budget before they leave home will be less likely to get into trouble with cash OR credit in college. Today’s cash equivalents such as prepaid cards, debit cards, or college based "smart cards’ backed by money you’ve placed in an account for on-campus expenses can give students emergency protection without unlimited liability.

Source: Bodnar, J. (1999, September). Making cash king on campus. Kiplinger's Personal Finance Magazine, p. 116.