7 Parent-Child Money Conversations That Must Happen Before Senior Year

Passing on a Legacy of Smart Financial Decision-Making

High school students have many concerns on their mind—grades, their car, their crush, and the cafeteria’s mystery meat sandwich, just to name a few. But of the numerous concerns that consume your child’s thoughts in high school, money is probably not one of them. However, we know the advantage a basic understanding of money can give your child as they enter their senior year and are looking toward college.

So, it is up to us, the parents, to discuss the money challenges they will face. You may already have some financial knowledge you want to share with your child. Maybe you learned a few money lessons the hard way, and you want to make sure they do not repeat your mistakes. But if you are struggling to determine what you should discuss, let me help you get started.

Here are seven parent-child money conversations that must happen before senior year:

  1. The most expensive college is not always the best college. There are many good colleges out there. Some are really expensive and some are not. What really matters is not how much you pay but how much you apply yourself. Be willing to explore less expensive options.
  1. School loans are easy to get but difficult to get rid of. Since most teenagers have never taken out a loan, they cannot understand the burden of having to pay one off. Show them the numbers. Maybe talk to them about your loan experience. Make sure they understand the full ramifications of signing that piece of paper.
  1. Speaking of debt, let’s talk credit cards. Credit card companies love college students. Because of this, your child will find ample opportunity to apply for credit cards at college. Like loans, make sure they understand how these cards work and the consequences of maintaining a credit card balance. High interest rates and minimum payments are a nasty combination.
  1. Budgeting, the necessary evil. There are few that get thrilled about budgeting. And it is likely your child is not one of them. However, they need to understand the importance of aligning their expenses with their income. Walk through a few hypothetical college student budgets with them. Operating on a budget will help them avoid using credit cards or calling back home (you) for more money.
  1. Now is the perfect time to starting thinking about what happens when they turn 65. Certainly, retirement seems like a long way off for your child. However, you know two very important things—(1.) Life moves quickly, and (2.) the power of compounding. If they are working, have your child set up a Roth IRA, show them this post, and get them contributing now.
  1. Friends don’t ask friends to co-sign. Co-signing for loans or credit cards may seems like the nice thing to do for their friend who is not able to get one on his or her own. But it is incredibly dangerous. There may be a reason why their friend is not able to get a loan or a credit card. Your child needs to know that if their friend decides not to pay, they are now responsible. If they don’t pay, their credit plummets. And terrible credit may affect their ability to get a job, among several other things. So stay away.
  1. Be generous. God has designed us to be conduits through which his generosity flows. Being a college student does not provide an excuse for abandoning God’s design for their life. And as Mark 12:41-44 shows us, those who give away numerically little may actually be those who are the most generous. In God’s economy, amount sacrificed always supersedes amount given. Encourage them to make giving a priority during their college years.

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