Financial Literacy for College-Bound Seniors: Equipping Your Child with Money Management Skills

 

These days, it’s not unusual for college graduates to leave school with more than just a diploma–many will be carrying student loan and credit card debt for years to come. If your high school senior is heading to college next year, there are several ways you can help them become more financially literate so their college experience doesn’t end up costing them for the rest of their lives.

 

The first step is to simply talk to your student about money and the importance of managing it. Work with them to set clear financial goals, whether it’s building an emergency fund or saving for specific expenses, says Cameron Galbraith, a financial adviser and content creator focusing on money management for college students and other young people.

 

“Teach them to differentiate between needs and wants, avoid impulse buying, and take advantage of student discounts or coupons,” he says. “Encourage them to cook meals instead of eating out and use free campus resources like events and software. Thrift shopping and buying secondhand can also help them save on essentials.”

 
Emphasize the long-term benefits of saving by modeling good financial habits yourself. Encourage your student to get a part-time job and set up automatic savings transfers to ensure their money continues to grow over time. Most importantly, sit down with your student and help them establish a budget.

 

“Setting up a budget as a college student is a vital step toward managing money effectively and avoiding debt,” Galbraith says.

 

Here’s a simple way to set up a basic college budget:

• • Start by listing all sources of income, which may include financial aid, a part-time job, or an allowance from family.

• • Outline essential monthly expenses such as rent, utilities, groceries, transportation, and textbooks. Don’t forget non-essential costs like entertainment, dining out, and personal spending.

• • Compare income to expenses, and see how much is left for discretionary spending or savings.

• • Once you have a clear view of the finances, allocate a portion of income to different categories, ensuring that essential expenses are covered first. Try sticking to the 50/30/20 rule, where 50% goes toward needs, 30% toward wants, and 20% toward savings or paying down debt. Budgeting apps can help students track their spending.

• • Encourage your student to review their budget regularly, especially as expenses or income sources change throughout the semester. “The key to successful budgeting is consistency and preparing for both expected and unexpected expenses,” Galbraith adds.

 

Incoming college students should also be aware of the many expenses they’ll face beyond tuition and housing.

 

“One of the most immediate costs is textbooks and course materials, which can add up quickly, especially for specialized or technical courses,” Galbraith says. “While renting or buying used textbooks can save money, students should still budget for these recurring expenses each semester. Additionally, many classes may require access to specific software or online platforms, which might come with extra fees.”

 
Even if your student has a meal plan, they may want to budget for snacks or occasional dining out. Transportation costs (whether using public transit, ride-sharing services, or bringing a car to school) should also be factored in.

 

Discretionary spending, such as entertainment and travel, must be accounted for as well. Even small expenses like coffee, social events, or takeout can add up quickly.

 

“Additionally, technology-related costs, such as maintaining a laptop or paying for streaming services, can be easy to overlook but are often necessary for both academic and personal use,” Galbraith says. “Awareness of these expenses will help students manage their finances more effectively during their time at college.”