Preparing to send your child to college is an exciting and nerve-wracking time full of big emotions, important conversations, and new challenges to navigate together as a family. One of the best ways to get ready is to have open and honest conversations about money, family finances, building good habits, and your expectations for the years to come. There's a lot to consider no matter your circumstances, but the talking points below will help ensure everyone is on the same page as you embark on this adventure.
Paying for college
One of the first discussions you'll inevitably have with your college-age kid is how you as a family are paying for their education, room and board, books, and travel, among other things. This is also a good time to discuss the pros and cons of student loans, scholarships, grants, andother ways of supplementing tuition payments. If you are using the cash value of your whole life insurance policy to pay for college,why not teach your child how that works? Explain the importance of your child having their own permanent life insurance policy one day and how itcan help them pay for big events in their own life down the road.
Creating and sticking to a budget
It's key to walk through how to create a monthly budget with your child, especially if you think they may be tempted to treat themselves more often than not. Show your kids how you create your family's budget for monthly bills, groceries, commuting expenses, and other miscellaneous costs. Review how you come up with how much to save vs. how much to spend. You may even want to recommend an easy-to-use app they can access on their phone at anytime.
The importance of saving
While you may have taught your kids about saving money way back when they got their first piggy bank,now is a good time to reiterate the importance of putting money away for a rainy day. Reassure them that they can still enjoy their life at college while saving a few dollars every week, and the money in their savings account can collect interest and grow over time.
Managing a credit card and building credit
College can be the right time for your child to get a student credit card and start building their credit history. Discuss interest rates and responsible credit use so they know what they're signing up for. Another option is to add them to one of your credit cards as an authorized user. This can help them build a credit history while allowing you to keep an eye on their spending habits.
The benefits of having a job
For some students, working one or more jobs may be a way to fund their education. For others, holding a work-study or part-time job on or off campus can help supplement tuition, books, meals, and fun with their friends. Learning how to have responsibilities outside of the classroom is a skill that will serve your child for many years to come—and provide them with extra money for that can't-miss spring break trip they've been telling you about.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value will reduce the death benefit and may affect other aspects of the policy.