Mastercard Brochure
 

MONEY TALKS
Helping Your High School and College-Aged Children
Master the Financial Facts of Life

[From Page 3]

START WITH THE BASICS: BUDGETING

An excellent way to teach your children the fundamental principles of finance is to jointly establish a budget for college. The simple act of preparing a budget will make your kids think more carefully before they spend and will give them a greater sense of control.

The worksheet in the back of this brochure will help your children look at the big picture before they get any big surprises in the form of credit card bills, bounced checks or automated teller machines that refuse to surrender cash.

College students’ budgets shouldn’t be complicated. Simply follow these steps:

  1. Work together to itemize your student’s regular monthly expenses.
  2. List total income, which may include money previously set aside, scholarships, loans, allowance or perhaps wages from a part-time job during school.
  3. Subtract expenses from income to see if the budget is reasonable.
  4. If the expenses outweigh the income, work together to trim expenses until the numbers agree.
  5. If at all possible, your children’s college budget should include a savings strategy; and encourage your kids to make regular deposits into a savings account for future expenditures (such as a car, an apartment or student loans).

You may want to sit down together periodically to review the budget you’ve developed. Be sure your kids understand the importance of maintaining this budget to avoid overspending and debt trouble. But also remind them that it isn’t carved in stone. If their favorite band is coming to town and they want to splurge on a concert ticket, they can simply cut back on other expenses for a month.

Five Signs of Overspending
Work with students so they can identify the signs of overspending. They should be able to recognize a problem if these patterns develop.

  1. Always paying your bills late;
  2. Only making the minimum payment on your credit card;
  3. Exceeding the credit limit on your accounts;
  4. Working overtime to keep up with your credit card bills; and
  5. Using one credit card to pay another.