Teach Your College Student How to Manage Money

After graduating from college recently, I have seen big differences in my friends' work ethics based on how their parents taught them to handle money. Basically the friends who were taught money has to be earned have turned into hard working adults with a good work ethic, while those who were taught little about money management are still struggling to adapt to the real world. If you have a kid going to college anytime soon, you can do simple things to help them become a fully functioning adult after graduation.

First of all, you absolutely need to teach your child the ups and downs of credit cards. They do offer cash back, points for travel, etc. but they can also do a person more harm than good. One of my friends, friend #1, seems to have been taught very little about how responsible adults manage their money. During a year long period of unemployment during her last year of college, she continued opening and using credit cards. She then had to borrow from her parents to make minimum payments. Conversely, friend #2 had been taught the basics of money management and has always made sure she can afford to pay all of her bills herself.

You also cannot blindly give your child money every time they ask for it. If they genuinely need it, it's perfectly ok to give it to them. But if you give them too much money too often it will encourage them to take advantage of you. Friend #1 was able to get basically all the money she needed from her parents, and consequently spent about two years unemployed and didn't seem very concerned about having no income. Friend #2 only got money from her parents if she genuinely needed help, and was therefore more encouraged to keep a job.

Working during college can be difficult, but those that work during college learn time management and the real value of a dollar. The students I knew that never had to work spent money quite freely and seemed to have no concept of how much they actually spent.