Back-to-school season is a great opportunity for students to refocus their educational and career goals. As students prepare for their future they will need to understand how to set a budget, choose a career path, and save for tuition. Parents and students should start saving early and having an open dialogue about how to prepare for financial independence.
Our experienced financial professionals are here to provide insights that students and parents can use when considering the path ahead. Financial Advisor, Paul Delzio provided the following responses to common questions parents might discuss with their children about managing money and approaching their careers.
What advice do you have for balancing a budget? What are the pitfalls students usually fall into?
Make a budget while you are in high school and ask your parents to help you make a budget. Stick to it. When you go to college ask your parents to help you with a college budget. Having your parents involved shows maturity and sticking to it shows discipline. This might make your parents more likely to fund your college budget (if they can).
What advice do you have for students as they prepare for their future careers?
Talk with your college counselor at school. Research top paying college graduate jobs. Pick a major that will lead to one of these top paying jobs. You should learn and explore while at school, but avoid college degrees that represent niche careers unless you are truly passionate about them. You don’t have to stay in your first job out of school, but you will need a job once you graduate. Be realistic.
Should students be building credit while in school? How?
College may not be the best time to start building your credit. Getting your first job is the most important way to build your credit. If you feel you need to build a credit history then have a bank account and get a debit card. Never get a credit card in college. Way too dangerous. Debit cards provide similar credit enhancements.
What is the best way to save and make plans for college?
The best way to fund your education is with a 529 Account. This is a tax free account on all investment gains earned in the account. The 529 accounts should be opened when the child is young to allow for long term growth. The 529 is a great idea for friends and relatives when you have your graduation party: let your guests know that “We have set up a tax enhanced education plan for Paul. If you are thinking of a gift, make a donation by writing a check to: Wedbush Securities FBO Paul.” You will be surprised how many relatives will donate if the check is made to Wedbush and not the student!
Absent a 529, or in addition to the 529 account, save money on any high school jobs that you have had.
For more information on financial planning and back to school advice, reach out to Paul directly or visit his page to learn more.