With lower-paying jobs after graduation and several student loans to pay off, twenty year old students can be deep in a financial hole with a long climb out. Timely information on what an unsecured loan can mean will help a college student preserve their finances.
Parents Role
Parents should do explain how fast interest can pile up on a credit card and help their college student determine a budget to pay any personal loan. If parents are going to provide their child with a credit card they have several options. But be sure to tell your student about how hard it is to get an unsecured loan with bad credit.
You can consider adding your college student to your credit card account or open a separate account for him as long as you set some ground rules and limits. One option lets your child have a prepaid credit card set up against his bank account. He can deposit his earnings or allowance into the account and pay his car loan. Nothing helps teach your child the value of money than using his own! That way he doesn't get behind and he won't have to look for a home loan with bad credit.
Thinking Ahead Can Be Thought
Buying a home or vehicle may seem way down the road for your child, but explain to him that a loan with bad credit is difficult to come by. Make sure he knows that even one late payment could show up on his credit report. Young students need to understand that their current decisions will affect their future and limit their ability to get finance and make their dreams possible.
Personal Loans As a Source of Finance
A short term personal loan may be an option if a student needs finance due to getting over-extended. Don't just give him the money, however. Set up payments for him to pay you back. This is an excellent way to teach proper financial behavior. Even though the loan is in your name, you can make him think that he or she is the one who owes the money and create the sense of responsibility that is needed in financial life.
You can explain the concepts: interest rate, loan term, repayment program, loan installment, income, debt, income to debt ratio, etc. You can also explain what the consequences of late payments or missed payments are, how credit is measured, how it can drop and how it can rise and what can happen to their credit score if they fail to meet their obligations (default and bankruptcy). At this stage young people can assimilate a lot of information so it is wise to explain to them what will help them live a life with ease in the future.
Financial Planning For College
It's never too early to start planning for college. You don't want to burden yourself by spending all your time in the present exclusively worrying about future. The future will come soon enough. Enjoy today, but always keep one eye looking ahead. If you are looking to jumpstart your academic future, here are a few ideas to help you start planning for college early.
Start saving money. College isn't cheap. You need to understand how you're going to pay for school before you get there. Are you going to work while you study? Are going to take out loans? What about scholarships and grants? If you're ready to begin preparing for college, you need to consider your funding choices. There's plenty of money out there, so be sure you understand how to get it.
Start taking college prep and community college courses while in high school. Beef up your academic transcript by taking (and doing well in) college prep courses in high school. If you feel like high school isn't challenging enough for you, then start taking community college courses when you are 16 or 17. If you take a class at a community college you can transfer the credits to a four year university and get high school credit for your out-of-school work. If you have the smarts, bypass high school altogether by testing out.
Start thinking about what it is you want to do with your life. Self-reflection is a huge part of the college preparation experience. You need to ask yourself who you are, what you want out of life and what you want to do for a living. Probe into your interests deeply, and be honest with yourself about what you find.
Start thinking about where you want to live and learn for four years. If you want to live in Northern California, then don't apply to Boston College. You will not be married to your college town, but you will be linked to it intensely for a few years. Make sure you're happy about where you end up. Visit any schools you apply to so that there will be no surprises about the campus environment and surrounding areas.
Start tackling some extra-curricular activities. College preparation requires that you show interest in things outside of the classroom. Start a German club or learn how to play the piano. Try out for your junior varsity football team and volunteer time at a hospital or nursing home. Whatever you do, try to look busy. Admission officers love students that possess proven dedication and full schedules.
Start developing good study and time management habits. Take school seriously and develop your own style of learning. When you get to college, it's just going to be you, your study habits and your time management skills. Make sure you've honed them properly so that you can hang when you get to your university.
Don't forget to enjoy your time as a young adult. Planning for college is important, but so is balanced living. If you stress yourself out too much in high school, you run the risk of having way too much fun in college. If you get some of those jollies out early, then by the time you get to your university, you've already had your fun, and you can focus squarely on the task at hand. Start preparing for college early, but just remember not to freak out.
Both Ada Denis & Chris Stout are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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