Parents need to have a money conversation before they send their college freshmen off to school. Most new college freshmen have never taken a course in money management or personal finance. Personal finance isn’t taught in America’s high schools. And, it’s up to parents to have a money conversation and discussion about being financially smart before their children learn hard lessons on their own.

A recent survey by USAA.com found that 82% of parents are discussing budgeting with their soon to be college student. Parents must have a tough money discussion with their children just like they would discussing their expectations and priorities for their children’s academic studies.

Here are three key topics that parents should discuss with their college bound children during their first year on campus.

Money Discussions Parents Need To Have With Their Children

Building Credit Responsibly

When I left for college, my mother gave me a credit card to use for emergencies. She had me listed as an authorized user of one of her credit cards, and I got one associated with her account with my own name on the card.

The real issue came from us not having a very good and clear discussion before I left about money and what constituted an emergency. Her idea of an emergency and mine turned out to be vastly different when I started charging lunches with friends, clothes, and a host of other things on the credit card.

“Responsibly managing credit is a key part of the financial education that should be happening at this time of our kids’ lives,” says JJ Montanaro, a Certified Financial Planner at USAA. “To that end, I like the idea of helping our kids obtain a low limit credit card or a secured card.”

Other financial experts don’t recommend parents giving their children a credit card as an authorized user on their card. Others simply think that young adults need their own credit cards in order to help them start to build their own credit history.

Another option is for parents to help their college-bound children apply for a secured credit card to start. Many secured cards require a deposit that acts as the card’s credit limit. Many secured credit cards also report activity to the three credit bureaus, which helps young adults build a credit history for other non-secured purchases later in life.

Be sure to check out a USAA Secured Credit Card that can help you build or improve your credit score. The card from USAA is secured by an interest-earning CD, which you set up when you open the account.

“While you can add them as an authorized user, that approach could increase the potential damage of a misstep,” says Montanaro. “Adding [a child] to my $20,000 limit card vs. cosigning a $1,000 card is potentially less dangerous. The beauty of this sort of arrangement is that you can closely monitor what’s happening while they learn the ropes of responsibly managing credit.”

Or, you can send your college freshman to school with a prepaid debit card. Prepaid debit cards have many advantages to them that could benefit your student.

College is a place to learn both academically and life lessons. One-third of parents surveyed by USAA.com say their children will not have a credit card as they head to college.

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