Financial Planning for Millennials

Affordable Financial Planning for Millennials

Financial planning for millennialsA recent study was done by a major financial institution on the millennial generation and their money. One of the major revelations was that approximately eighty percent of these individuals that participated in the survey, stated that they learned how to survive and save after seeing how the great recession impacted their elders. Financial planning for millennials didn’t appear to be that important.

However, almost half admitted that their greatest financial concern was debt, and because of the high debt, they were living paycheck to paycheck. View full post…

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Need A College Student Credit Card – Read On

How to Get A College Student Credit Card – Learn How to Use Credit Cards

Get a college student credit cardAll too often, as most teens enter college, they are bombarded with offers for a college student credit card. More often than not, they haven’t received any type of guidance on how to use credit cards, and for some, the temptation can be overwhelming.

This is especially true for those college students that attend a college or university away from their home town. For many, this is their first experience at “leaving the nest”, and besides being homesick, they realize that they are on their own and must begin to make decisions that parents used to make for them.

One of the first items on the agenda, is to open a checking account if that wasn’t done prior to leaving home. Many experts in the financial field recommend that a checking account be established in the student’s junior or senior year of high school so that you’ll have some time to guide them in proper handling.

Proper use of a college student credit card is one matter where the student must be trained, and under the watchful eye of the parent. To do that, it may be a good idea to give the student a card in his/her senior year of high school, and in that way, you’ll be available to offer advice and other assistance.

Teaching the student how to use credit cards is not a one time lesson or lecture. There is a learning curve that comes from experience and they need to understand how to use the card responsibly.

They need to be shown what high interest rate credit cards can do to a budget. Explain to them how individuals get into serious financial problems with credit cards by purchasing unnecessary items without sufficient income to repay the debt.

If possible, show the student what happens when only the interest, or some small minimum payment only is paid each month. I call this an evergreen account because the principal balance never changes.

One way to train a student how to use credit cards is to set them up with a secured card for a few hundred dollars. In that way, they can use the card, but the liability is fixed at the amount of the cash securing the card. This may also teach the student how to establish credit in their own name in the future.

Using the secured card while they are in high school will give the parent an opportunity to observe their behavior and ability to handle the card. If the results are satisfactory, then the parent can move the student up to a regular card with a little higher limit. Also encourage the student to repay the entire balance each month to avoid wasting money on interest charges that are not tax deductible.

There are many different types of offers that students will be tempted with, and one gimmick that appliance and furniture dealers push are “same as cash” purchases. They allow the credit card holder to purchase appliances or furniture interest free as long as the entire balance is paid off in 6 months. Many financial planners advise against these types of purchases as they can backfire when a card holder purchases more than they can repay. Then the day of reckoning comes and new problems begin.

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