The College Financial Advice I Gave My Own Sons
March 9, 2020 | Stacy Miller, CFP®, Bright Investments
I was recently featured in an article titled "The College Money Advice You Wish You Heard." In the article, numbers 1&4 are excellent ideas that I fully endorse, but #3 is my favorite! Below is my complete story. It is so important to educate high school and college students on how to manage their finances.
The advice that I shared with my two college-age sons the summer before they went away to school was to get their own credit card so that they could begin to build credit for when they finish college.
We chose the Discover it® student credit card because there is no annual fee and cash back rewards. They both qualified for this card with little income and no previous financial history.
Both of my boys also have a credit card through my credit account to simplify making purchases with my money (and my approval) while they’re away, but this doesn’t affect their credit. So, it was very important to me that they get their own card.
With their new cards, they also got the stories of how I had a credit card in college and treated it like the FREE money it isn’t. For example, I shared a story about buying expensive sunglasses that probably cost 10x the already outrageous price once I’d fully paid it off. My words of wisdom were to learn from my mistakes and only buy what they can afford now.
Shortly after my oldest son arrived at college for his first semester, he had to buy books. He asked me how he should pay for them. I recommended that he use his new credit card and pay it off right away. What I meant was that he should pay it when his first statement arrives. What he did was walk outside the bookstore, pull out his cell phone, and pay it in the parking lot. After I finished laughing, I explained more clearly what I meant.
Now my boys like to update me regularly with their credit score. We’ve had many conversations about why it goes up and down. I’m most excited that they’ve taken an interest in building and keeping a good score. This will serve them well when it comes time to buy a new car and buy their first home. I’m glad that this advice positively affected their financial security.