Does your young-adult student need a crash course in personal finance? A financial literacy survey by the National Foundation for Credit Counseling (NFCC) reveals that most adults learned about personal finance from their parents.
Parents: Compliments of the NFCC, here's a checklist of basic knowledge that will benefit everyone managing his or her own money:
- Budgeting: Be clear with yourself and with your student about how much money is available for expenses. Help them create a workable monthly budget that balances income, loans, and gifts with anticipated expenses. This discipline is a skill that will pay benefits for a lifetime.
- Recording financial transactions: Show your student the importance of monitoring transactions online, checking their account balance daily, and reviewing their financial statements every month. Tracking expenses might reveal some surprises (60% of your income is spent on dining out?) and provide opportunities to change direction.
- Using credit: Tell your student why it’s important to commit to paying each credit card bill in full and on time each month. By using credit wisely, they will be learning how to live within their means while creating a positive credit file that could help when buying a car, renting an apartment, obtaining insurance, and landing a job.
- Getting financially organized: Help your student commit to keeping all financial records, bills, and bank statements in one location. This will help ensure that they will pay bills on time, avoid late fees, and keep an unblemished credit score.
- Recognizing the dangers of Identity theft: Discuss forms of identity theft, the kinds of personal information that need to be protected, and how to protect them—even, and especially, from friends and roommates. Discuss the pitfalls of careless, unprotected use of social media.
Remember, too, that your departing young adult is still eligible for a FUTURITY account at Extra Credit Union. Our low-cost, high-quality services will give any member a leg up on personal finances.
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