What should high schoolers know about finances before leaving for college? Listen in as @Work Manager Scott Dobson discusses the top three things every parent should talk to their kids about.

 

[transcript]

0:00:06.4 Lynne Jarman-Johnson: Money, I’m Home. Welcome in. I’m Lynne Jarman-Johnson with Consumers Credit Union. Joining us today is Scott Dobson. He is our financial education guru here at Consumers Credit Union, and he constantly is out helping others become financially savvy. We want your students, your kids to do the same thing. So, Scott, thanks for being with us. What’s your top three tips for parents and students as they’re heading out into the real world?

0:00:32.4 Scott Dobson: Sure thing. Yeah, those are… That’s a great topic, top questions. I think if I have a high school senior and they’re about ready to go out the door, and I’ve got just this summer left to teach them everything I can about taking care of their finances and financial wellness, I believe the first thing that I would do is to learn mobile and online banking together. And I would do that either, if you feel comfortable with that, just sitting down together and figuring it out, or stopping into one of our offices and talking to one of our people and say, “Hey, here we are. I’m a parent; this is a college kid. We’re going in different places, but we need to keep our finances going right.” And they can absolutely help you with that.

But having mobile and online banking working for you and your college bound kid can really help financial communication. You can really see where they’re spending money, where they’re going, when they get low on money, if they’re spending too much, if they’re not saving anything, and our staff, of course, can help you set up anything you want to understand where. The low balances, or high balances, or money going in and out, to really make it easy for you guys to communicate and understand where you are, so you’re not just calling on a Friday and saying, “Mom, I need $500; please just send it to me.”

0:01:45.1 LJJ: I love the word “together”, Scott. I think that is the… that open communication is so important when you’re talking about money and finances.

0:01:53.7 SD: Yeah, when you’re doing that together, I think with banking and if you have an account with your kid as you’re trying to get them to learn is really about them using and learning and the parents verifying and protecting, and making sure they’re doing the right thing, and looking over that. And using our online technology and digital technology can make it super easy for the credit union to send you information to say, “Hey, your student has $5 left on their debit card. You might want to chat with them.”

0:02:22.3 LJJ: So, tell us about number two. So, number one is learning mobile and online banking together. What’s number two? We got top three, baby.

0:02:30.8 SD: Yeah, debit cards. I guess that’s the number one is… Or number two is learn to use a debit card correctly. Use it to learn it for buying online, use alerts and make sure you do not ever overdraft your account. Overdrafting your account causes fees, and that’s no fun at all. So really learn how to be able to use it in a digital environment. How to use the debit card when you’re at a store, how to use alerts and online banking to know exactly how much money you have, so that you’re not going to overdraft your account and get charged a fee. So I think that would be, the second one is … A debit card is a powerful tool. It can make it very easy for you and convenient to buy things. You can set up our debit card with Apple Pay, so it’s very easy to use it. You just really need to understand that that money comes out and you need to know how much money you have in the account, so you don’t spend more than you have. So a simple concept, but a lot of people don’t take the time to learn how to use our digital tools to make sure that they know how much money that they have.

0:03:32.6 SD: So, learning to use that debit card and not overdrafting your account is probably my second most important topic I’d teach my youngster if they’re heading off to college. And the last thing I would teach them is to not damage their credit. As a young person, I’m not really concerned too much about them building credit or needing credit. If you’re 18 or 19 years old, you’re probably not looking to buy a house; you’re saving money and doing all that stuff. So, for me, it’s not… In your first formative years, it’s not so much about building credit, it’s more about not damaging their credit. So, talking to kids about specific things that could damage their credit score. Overdrafting a bank account and then just leaving it forever. Applying for a credit card every time they go to a store to get anything and they say, “Oh, we’ll give you… ” And you apply and get turned down, but you do it every single week.

0:04:24.5 SD: Or my favorite one, co-signing on a loan for someone else. I have a great story. Do you have 30 seconds or maybe a minute? I’ll take it. But it’s worth it. I had a friend who had a kid that they had co-signed on a credit card for to help them build their credit score, so they would have great credit for the future. Seemed like a wonderful idea, but their 19-year-old was maybe not the most responsible. He went off to college. Met his roommate. They became best friends. They went to a motorcycle dealership. They decided they were both going to buy dirt bikes, because it was like $99 down and $99 a month, they’d give you a dirt bike. He buys the dirt bike. The friend goes to buy… and they approve him for it. He had good credit, ’cause his parents had gotten him a credit card, so he had six months of on-time payments. His buddy went to buy the motorcycle. Did not have credit, and they turned to him and said, “Would you vouch for your buddy?” And he said, “Absolutely.” And he co-signed for his buddy, and then his parents ended up paying for his buddy’s motorcycle after it had ruined his credit score.

0:05:29.7 SD: So just knowing enough to say, “Hey, co-signing on a loan for someone is a really bad idea.” This young kid had no idea what that meant, and he was just got in a bad situation because he didn’t know. So kids don’t always learn a lot when they’re 18, but if I’m with my kids at Kohl’s, and we’re checking out and they say, “Do you want… ” I always say no, and I tell my kids why. So, I just use real life situations to say, “This is why I don’t apply for credit every time. This is why don’t do that, I don’t, try to get a discount. And this is why I’m not co-signing on a loan for any one of my friends or even you,” really doing those real-life situations and talking to kids and say, “Here’s how credit works, here’s how it can help you, here’s how it can hurt you,” in those real life situations. Hopefully, it will help them learn, and you can keep them from doing anything too damaging, so when they go to get credit they’re not in a hole.

0:06:22.1 LJJ: Scott, thank you so much! What a great series on helping your kids as they are heading out the door into the real world. Some people call it “adulting” right now.

[laughter]

0:06:32.1 LJJ: We’re all adulting, right?

[laughter]

0:06:33.9 SD: Yeah.

0:06:36.0 LJJ: Thank you for listening to us this last few weeks, and make sure if you have a conversation you’d like to have about, as your students head out the door, please send your topics our away. You can also go to our website. We have so many financial education topics to help you. You know it’s not an easy time, but it’s easier if we do it together. So, Scott, thank you so much.

0:06:57.5 SD: Sure.

0:06:58.0 LJJ: And I’d like to thank Jake Esselink for his production skills today. I hope you’re all having a great week. Join us next week as we start a college after college series, focusing on the youth of today, and I’ll tell you what, there’s so many new things that are happening, and it’s the homebuying time; it’s big stuff. So, join us, join us then. I’m Lynne Jarman-Johnson with Consumers Credit Union. I hope you have a great week.

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