Advance financial planning sets tone for college student's future
JANESVILLE—Sam Licary had checking and savings accounts throughout high school, but when the 2011 Milton High School graduate enrolled at Blackhawk Technical College, he and his parents decided he should open a credit card account and take out a loan to buy a car to build good credit.
"With just a checking or savings account, it doesn't do anything for your credit score," said David Licary, Sam's dad.
"The goal is to build this now so when he's done with (technical) school, he's got a well-established credit score and no debt," he said.
To get started, the Licarys made an appointment with a member adviser at Blackhawk Community Credit Union, who provided helpful information.
"I learned options," Sam said.
"They offered me a loan I could take out by myself without my parents having to co-sign and gave me the idea to have a credit card in my name to boost my credit score rating," he said.
The low-limit credit card was enough for an emergency, David said, and not too much to allow overspending and cause trouble, said Lisa Licary, Sam's mom.
First-year college students face plenty of challenges in this new phase of life, including how to effectively manage their money.
And although high school is a good time to start learning about money and budgeting, it's not too late to learn about financial literacy even as you prepare to enter college, said Lisa Palma, BCCU marketing director.
"When parents are taking their children to buy all those things for their dorms, that's the same time I'd be making sure their finances are in order. It should be part of that list of all the things they need to go off to college," she said.
Palma suggested scheduling a personalized appointment to get started while member adviser Nikki Stephens said dropping in at one of the credit union's branches also is acceptable. A parent must accompany any student younger than 18.
"Our employees will sit down with a parent and a college student and make a plan for how they can get access to their money, how to view their credit card bill, how they can pay it and make sure they have all the tools they need," Palma said.
There needs to be a plan for what is needed--a credit card to pay for books or expenses or a debit card to access a checking account to get cash, she said.
Because credit and debit cards are universally accepted, Palma also said it isn't necessary for a student to have a financial institution in his or her college town.
"With online services and mobile banking, everything is at their fingertips. They don't need to walk into a branch (office) to do banking," she said.
When students open checking/savings accounts and have debit cards, they establish banking relationships for when they have future needs, Palma said.
"It also creates a financial institution relationship that's established and starts building credit for them if they open a credit card," she said.
Advance financial planning helps set the tone for the future and allows college students to focus on studies and not worry about finances.
"To learn about budgeting, spending, needs and wants and living within a certain amount of money each month and to be able to manage that individually now that they're off to college, that sets the tone and habits for the rest of their lives," she said.
Managing money is something many folks don't think about, yet it's crucial for students to establish relationships with financial institutions, Palma said.
"You're sending them off to college, and you want them to learn all these great things. You also want them to be successful in life,” she said.