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It is no news that the average college graduate already has a whopping debt to show for their education. While some of these debts help to pay for tuition, truth be told, some college grads could have left college with far less debt if they were more money savvy. For many this will mean some small changes in the way they view and handle money.
How to Become Money Wise
One of the first things any college teen should be taught is the value of budgeting. Budgeting will help them spend only what they can afford to spend and therefore limit the incurring of unnecessary debts. Budgeting is just as important for managing real cash as it is for tracking credit card spending.
Some pointers that teens should be given about finance and money management when college-bound are:
- Saving a portion of their weekly or monthly allowance for emergencies to develop a saving habit.
- Credit cards should not be abused. They shouldn’t be used to pay for parties and non-essentials.
- It is important to pay off credit card balances and not just the minimum balance.
- They should be taught about interest rates and other simple finance related topics. This will help them understand which credit cards are better based on interest rates.
The money management habits developed in college will come in handy as they mature and become adults. Plus, they will leave college without having too much debt before they even start earning an income. This is also important for building a good credit rating and avoiding excessive credit card fees.