You spend years planning for college. You order essentials for the dorm rooms. Pack and ship the most important items your child cannot live without. Then, after the tears you say goodbye.
On the way home, you reminisce about the last 18 years, and think, "Wow! My baby is all grown up.''
Yet in less than one month you get a call from your child, who says, "Mom, I need money! My card is not working!"
You respond, "What? That money was supposed to last you for a month. What did you do with the money?"
The conversation continues.
"I don't know, Mom. I think I'm out of money because the restaurant declined my card."
"You're eating out? I bought you the meal plan!"
"I don't like the food. It's gross!"
This conversation actually happened to a friend of mine. I'm sure many parents can relate to it.
Don't learn the hard way that you can't send a child off to college without having a money plan in place. Here are three simple steps you can take to put your child on the right money path.
Money 101
Do the math with your child. The average semester is about 15 weeks long. To keep it simple, let's assume that your child will spend $10 a day, which is $1,050 for the semester.
If your child decides to go to a movie, dinner and catch dessert, like he did at home, that just set him back two and a half days.
You must help him plan ahead, instead of coming up short. Explain to your child that he has $10 to spend daily, and he will have to make choices about what he'll spend it on.
If he has plans to go out Friday night, then he's going to have to make the choice to stay in Wednesday and Thursday.
Spending money is about making choices. Life is about making choices, and the sooner your child understands this, the better.
Monitor the Plastic
If your child is using an ATM or a credit card, they must get in the habit of checking their spending daily. With the Internet and phone apps, this is easy to do. You must help him get in the habit of knowing where the money is going, before it's gone.
If you are spoon-feeding your child's credit card, you should be on the account with him, so you can see where the money is being spent. All you need is the log-in information to go online to his account.
Your child should be checking his account in the morning or at night to monitor his spending every day.
You can call or text him at random and ask him how much is in his account. He should be able to have a real close idea. If not, you should stop giving him money, until he's in the habit of monitoring his spending.
There are no "do-overs" with money, and the mistakes can be costly for years to come.
A good rule of thumb is that kids should use a credit card or a debit card, but not both, until they are financially savvy. The last thing you want to receive is the "I-have-no-money" call, and then the credit card bill arrives.
"Recession Generation"
Charles Schwab's 2011 Teens & Money Survey names this generation as the "Recession Generation."
Today's teens feel that there is more pressure on them to have more things, like computers, cell phones and clothes. They feel that people are more obsessed with money than in previous generations.
On the upside, the kids state that they are less likely to ask for things and appreciate their family more. They have a greater appreciation for how hard their parents work to provide for them.
The opportunity is here right now to give kids the money education they need that will define their futures. Money is not complicated; it's actually pretty simple.
If you spend more than you make, you're broke. If you save, invest and live within your means, you will create financial security.
Teach your baby well, because if you don't, he will be back looking for you at your doorstep or begging you for handouts. It takes time and patience, but it will pay great dividends in the future.