Jean Chatzky: 5 money tips for college

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If you — like me — are sending a child off to college in the fall, you’re probably looking forward to a last summer of sorts. I know I have a few quality-time trips planned, plus lots of errands for dorm essentials.

The to-do list is not short. But one thing I am prioritizing is passing on a few financial lessons before my daughter embarks on her freshman year.

Don’t get me wrong — you don’t grow up in my house without learning some personal finance building blocks. But even the most financially savvy freshmen can go to college and blow their budgets the first month. For many, it’s their first time managing money on their own, which leaves a lot of room for error.

Here are five things your kids should know before moving into a dorm come August.

Master the basics of budgeting. I think all college students should go to college with at least a rough budget — it can be broken down by semester, month or even week.

It can be hard to get a handle on expenses ahead of time, so you may need to sit down together (or FaceTime) and do some tweaking after the first few weeks. But many colleges will also provide some guidelines here, like a sample budget or list of common expenses.

A credit cards is a tool that needs to be used wisely. The Credit CARD Act did a lot of good work here, requiring that consumers under 21 prove income or have a co-signer in order to be approved for a credit card. But that doesn’t mean college students aren’t carrying credit cards: Often, proof of income from a summer or part-time job may be enough to qualify. (A 2012 study by a University of Houston Law Center professor found that some students were even qualifying by listing loans as income.)

“If you don’t talk to your college student about credit, others will,” says Sophia Bera, CFP professional and founder of Gen Y Planning. “They will likely be bombarded with credit card offers once they’re on campus, so take some time to explain how interest works and why it’s important to only charge items that you can afford to pay in full every month.”

I’m actually in favor of credit cards for college students, provided they are managed responsibly. If your student can’t qualify, you can add him or her as an authorized user on one of your own cards; you may be able to set a separate spending limit. This helps build a credit history, but you maintain control over making the payments.

Saving is important. Having a financial cushion not only keeps you out of the aforementioned credit card debt, it gives you financial freedom — college courses are stressful enough without the added pressure of money worries. If your child has earned income, he or she can also contribute to an individual retirement account, says Bera. At their young age, a Roth typically makes sense.

You have to protect your identity. College students are the least concerned about identity fraud, but the most susceptible to the crime, according to Javelin Strategy & Research’s 2015 Identity Fraud Study. They’re also four times more likely to be victimized by “familiar” fraud, which is perpetrated by someone the victim knows.

“Students have to be aware of protecting their identity, and that means everything from PINs to credit card numbers to Social Security numbers and even their date of birth and address,” says Laura Levine, president and CEO of the Jump$tart Coalition for Personal Financial Literacy in Washington, D.C.

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Always read the fine print. This goes for everything from those credit card applications to college or dorm agreements and even app downloads.

“Young adults need to be aware that contracts are serious,” says Levine. “All that writing is there for a reason, and if they’re not aware, they need to make themselves aware of what they’re agreeing to before they agree to it.”

If they have questions about a document, many colleges have student legal aid offices that can help.