Don’t Let Your College Student Become a Financial Failure

by Gary Foreman

Don’t let your college student make some of the money mistakes you did. These tips and tools can help keep them from financial failure.

You’re wiser now than you were in your 20s. And you’d love to help your college aged child avoid some of the financial mistakes you made. Are there things you can do to keep your student from becoming a financial failure?

To help us understand the problem and what can be done, we contacted Gregg Murset. Gregg is a CFP® and Founder and CEO of BusyKid.com.

Q: What are the warning signs that your child is heading for financial failure?

Mr. Murset: Here are a few things to watch for:

Laissez-faire attitude about money and work ethic

Multiple credit cards

Doesn’t save

Doesn’t work much

Always needs bailing out by parents

Borrows money from family or friends

They move back home.

Q: How can you approach them in a way that leaves them open to your concerns?

Mr. Murset: It’s never going to be an easy conversation at any time, but if your child is over 20, it will really be tough. That’s why it’s important to instill the values of work, earn, save, share and spend early in life. By teaching these principles early and building some points of success, you will be able to use these examples when your child is an adult to prove they are capable of doing it.

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Q: What are the most important steps for them to take to turn their finances around?

Mr. Murset:

Create a change in attitude and habits.

Go to a “cash only” life to reduce leaning on credit.

Have someone play “vault” to provide allowance each week. When money is gone, there is no more.

Take a course in personal finance in order to learn how to get out of the hole.

Q: What’s the best way for them to deal with peer pressure to spend more?

Mr. Murset: Develop a support system to balance peer pressure and develop open communication. Whether it’s friends or family, having a support system and open lines of communication can go a long way in helping someone avoid the pressure that comes from advertisers or other people your child hangs around to make bad financial decisions.

Q: Is there a point where parents need to cut off financial support? If so, where is that point?

Mr. Murset: I hate to say it, but yes, there is. There comes a time when the financial and mental well-being of the parents must take priority.

If you know the money you give your son or daughter will be spent foolishly, don’t be a fool and give it to them. You might as well just burn it. There are plenty of stories floating around about parents who have given thousands of dollars to their kids, only to see it wasted. Everyone wants to believe that their kids will do the right things and make good decisions; however, sometimes it just doesn’t happen.

Q: Are there any college courses that can be helpful in achieving a successful financial future?

Mr. Murset: By the time they hit college, the damage could already be done. When this happens, it’s time to call upon professionals who deal in credit or financial issues. As a warning, it could be embarrassing, time-consuming, and expensive to fix all the problems.

About the Expert

As the Founder and Chief Executive Officer, Gregg Murset has taken a simple thought and built it into the fastest growing website teaching kids about work ethic, accountability, responsibility, time management and making smart money decisions. Murset’s idea for BusyKid.com came from real life experience as he struggled to find anything on the market that would help teach his six kids the necessary financial principles they would need as adults.

About the Author

Gary Foreman is the former owner and editor of The Dollar Stretcher. He's the author of How to Conquer Debt No Matter How Much You Have and has been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.