Money Tips For Your College-Bound Student

graduate

Before you move your child into a dorm, it’s important to have a discussion about financial matters and your expectations regarding the use of credit and general money management behaviors. In this current environment, it is very important to start independence off on the right foot.
The following concepts can be a road map for parent and child in establishing solid financial practices.

Maintaining a Credit Score Is As Important As Maintaining a GPA
Discuss the importance of good credit and how this is integral to your child’s ability to achieve future goals (renting a first apartment, starting in a profession, buying a home). Having a healthy credit score and an accurate credit report are important to establishing good credit, suggests Loretta Abrams from HSBC North America’s consumer affairs department. Help your child remember:

  • Plan to pay off – or at least pay more than the minimum on – all bills on time.
  • Keep balances below 50 percent of available credit limits (30 percent is even better).
  • Don’t open credit accounts that aren’t needed (having too many requests for credit can lower a credit score).
  • Request a free report at annualcreditreport.com and make sure the information on it is accurate.

Helping your child choose (and use properly) the right credit card and build good credit habits are vital to successful future borrowing.

“Graduate” Your Student From Allowance to Expense Reimbursement
Rather than a monthly or weekly allowance, introduce an expense reimbursement system. In this way, you engage your child in discussions as you establish expectations, encourage ongoing communication about financial decisions and require formal expense tracking before reimbursement.

Encourage Savings With a Little Incentive
Encourage your child to open a savings account and establish a regular savings pattern by agreeing to “match” all or a portion of the savings above a certain threshold amount.

Banking 101 – With a Safety Net
Partner with your child in finding the right financial institution by discussing considerations such as branch locations, number of ATMs, costs, services, fees and product offerings. You can provide oversight by including yourself as a joint account holder. Most banks encourage online banking and have interactive sites to manage or transfer funds, set electronic limits and avoid overdraft fees.

Teach Smart Spending and Credit Use
Students should learn to use credit wisely and live within a budget. Smart spending doesn’t mean having to give up their social lives. Encourage them to be imaginative: Rent a video and get friends to bring drinks and snacks. Take advantage of free campus activities. Shop around to compare prices on books or basic necessities.

As Abrams explains, the college years can be a great opportunity for parents to introduce effective and business-appropriate systems for budgeting, saving and accumulating wealth.
For more free financial tips and information, visit yourmoneycounts.com.

CITYSunTimes Web Exclusives August 2009
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YOUTH & EDUCATION

The Grant And Scholarship Search
By Dr. Raymond J. Huntington

grant search

Most college-bound students and their parents know that there are thousands of scholarships and many kinds of federal, state and institutional grant programs out there – but how can your teen find this “free” money?
Here are a few tips on where to look for scholarships and grants and how to begin the search:

Use an Online Scholarship Search Engine
There are a number of free scholarship databases online where your teen can search scholarships on a variety of criteria. FastWeb (fastweb.com), for example, requires students to complete a detailed questionnaire and uses information provided to generate a comprehensive list of scholarships for which the user might qualify. In addition, FastWeb has a job and internship service as well as customizable online tools to help students stay apprised of application deadlines. Other similar scholarship databases include NextStudent (nextstudent.com), the College Board’s Scholarship Search (collegeboard.com) and Scholarships.com (scholarships.com).

Fill Out the Free Application for Federal Student Aid (FAFSA)
Any student wishing to receive federal student aid must fill out the FAFSA (fafsa.ed.gov), which will require copies of his or her parents’ previous year’s tax return (or estimated figures). The FAFSA determines your teen’s eligibility for financial aid, including loans, work-study positions and grants. Grants are often awarded based on financial need, and do not have to be repaid, such as Federal Pell Grants, Academic Competitiveness Grants, National Science and Mathematics Access to Retain Talent (SMART) Grants and Teacher Education Assistance for College and Higher Education (TEACH) Grants. Keep in mind that grant money is limited – be sure to file your teen’s FAFSA early.

Fill Out the PROFILE Form
CSS/PROFILE, the financial aid application service of the College Board, is used by nearly 600 universities and colleges to determine students’ eligibility for non-federal student aid. Contact the school to which your teen is applying to learn more about their financial aid process (and find out whether they require a separate application), and visit profileonline.collegeboard.com/prf/index.jsp to complete the PROFILE application. Note that the FAFSA is also used to apply for aid from states or universities – often in conjunction with other applications required by the institution or state.

Fill Out State Forms
Most states offer a variety of grants and scholarships to aid students pursuing higher education. Contact your state’s Department of Higher Education or other educational administration office to learn more about aid available to state residents and how to apply.

Investigate Private Scholarships
Your teen’s high school guidance counselor should have information on local or national scholarships sponsored by small and large businesses, professional associations or other community organizations. The Coca-Cola Scholars Program, for example, awards 50 four-year $20,000 scholarships and 200 four-year $10,000 scholarships annually (coca-colascholars.org), and the Best Buy@15 Scholarship Program awards $1,500 scholarships to 1,000 students each year.

The scholarship and grant application process is one that takes diligence and persistence, but is well worth the effort. Encourage your teen to utilize all available resources, narrow down his or her options, apply early and pay close attention to all scholarship deadlines and requirements.

For more information, call the local Huntington Learning Center at 480.538.5399.

Dr. Raymond J. Huntington and Eileen Huntington are co-founders of Huntington Learning Center, which has been helping children succeed in school for more than 30 years.  For more information about Huntington, call 800.CAN.LEARN or visit huntingtonlearning.com.

YOUTH & EDUCATION Web Exclusives | CITYSunTimes August 2009

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