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I'm the parent who requested last-ditch financial advice for my daughter headed to college (see Crash Financial Course for College Frosh). I appreciate your help and thought you'd like an update.
You suggested that we give our daughter more responsibility for her own bank account. So when she recently turned 18, we took her to the bank to open an account of her own without her father as custodian. The branch manager walked her through a lesson in how to manage the account, and much to our surprise she was eager to learn. Who knew?
We were afraid she'd end up spending all of her summer earnings before she left home. But after working double shifts, she estimates she'll be able to start the school year with $700 to $1,000.
She and I had a big money discussion one day in the car, and I decided to focus on two of your points: Keep track of her expenses, and don't get a credit card. Hope it works.
Thanks for the feedback. I'm sure your daughter will do just fine. Your experience illustrates a couple of points that should be encouraging to every parent.
First, don't sell your kids short. Give them responsibility, and they'll rise to the occasion.
Second, keep things simple. You don't have to track every penny, nor do you have to give your kids a long list of rules that cover every scenario. Stick to points that matter most to you.
Rest assured, your kids will listen. In a recent survey by Capital One, more than half of the teens interviewed said they wanted to learn more about how to manage their money. And they prefer to learn from their parents.
One study, for example, found that parents are the leading source of information and advice for college students regarding credit-card use -- and the more information parents provide, the less credit-card debt their kids incur.
Don't worry if you're not a financial expert (I'm here to help) or if you've made your share of money boo-boos. Your own life experience, both good and bad, puts you light-years ahead of your kids, so you should be able to field most of their questions.
The best college-savings plan
We just had our first child, and we'd like to know which college-savings fund would be best for our daughter. We live in Chicago, and we're considering the Bright Start College Savings Program sponsored by the state of Illinois.
Go for it. Illinois residents who contribute to a state-sponsored 529 college-savings plan can deduct up to $10,000 per contributor (up to $20,000 for joint filers) from their state income tax each year.
Also, the Bright Start plan is sold directly through the state, which lets you avoid sales charges that come with 529 plans purchased through a broker. See our state-by-state recommendations of 529 plans.
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