One of the great things about hiring summer interns is that you get to work with bright young people who can hit the ground running. And as a bonus, they contribute their expertise to my annual column on what kids need to know about money when they head off to college. Here’s what Amanda Lilly, Deanna Pan and Michael Stratford had to say about key financial issues.
» Bank accounts. When Michael went to orientation at Cornell University, he stopped at the booth of a local bank that was offering a $50 gift card for opening a new account. Michael soon ran through that — and much more — by racking up $40 overdraft charges on small purchases.
“It was my first parental bailout,” he says. To avoid any more, he opened an account at a bank with branches both at college and in his hometown so that his parents could make deposits if necessary. But it wasn’t necessary; Michael also signed up for text alerts to help him keep track of his balance.
» Credit cards. Deanna manages her monthly allowance with a checking account and a debit card. Amanda’s parents gave her a credit card to pay for food, but she wishes they had made her keep track of her expenses. “They added up way quicker than I realized,” she says.
I’ve heard that refrain from so many students — and parents — that my advice is to hold off on a credit card until kids have learned how to manage a checking account and can pay their own bills.
» Other expenses. Always buy used, advises Michael. That includes everything from books to dorm room furnishings. Email your professors ahead of time to find out which books you really need so that you can order them used from Amazon or some other cut-rate source.
All of this is great advice, but what also impressed me about these young people is that they had learned lessons that went beyond day-to-day money management. For example, Michael played an active role in applying for his own financial aid. To hold down costs, Deanna’s parents required her and two of her siblings — all Ohio residents and all in college at the same time — to attend Ohio State rather than a private school. At first she was disappointed she couldn’t “get out of Dodge,” but she’s happy with the outcome. “The most important thing I’ve learned is how extraordinarily lucky I am to have parents who will support me financially through college.”
