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Financial management

A look at better college and day-to-day spending habits

September 15, 2013
By KIM LOCCISANO - Staff Writer (kloccisano@timesleaderonline.com) , Times Leader

Money, money, money . Americans are quite capable of spending money, however, at one time or another in life, most of us will wake up to the realization that getting a little instruction about how to actually make our available money work for us, not against us, would be a very wise investment.

In fact, such an epiphany can literally make all the difference in the quality of life a young adult can look forward to as they progress through a college career and into the next phase of life as an adult with financial obligations, as well as school-related loans to repay.

The reality of now owning a degree and not being able to connect with the degreed profession and its anticipated income level can be devastating to a new graduate's plans for life right after their college days are done.

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Your financial footprint can have a big impact on future opportunities coming your way . . . or not. Overspending is easy, whether it be from purchasing goods from questionable sites online or failing to pay attention to ATM?usage fees as they pile up. However, with today’s electronic banking via online or smartphone apps, keeping track of accounts is much easier than before.

Add to the mix the reality that overspending while in college has already ravaged your credit status, and it may begin to look more like credit card debt stemming from college years can be as much a burden or more than student loan obligations for quite a while after that degree has been first handed to the new graduate.

Unfortunately, such lessons have often been learned through the kind of first-hand experiences parents and grandparents would simply have called "the hard way" - meaning it is just one of "life's little lessons."

In today's atmosphere of instant access to the good and the bad history of a person's life, financial footprint is considered relevant to most potential employers, meaning it can easily have a dramatic impact on potentially life changing opportunities coming your way or not.

The good news for those heading into their first year or two of college and their parents: banks across the country are increasingly finding ways to tie together the traditions of parents and children heading to the local bank to set up initial savings accounts and eventually checking accounts.

The key to today's new financial services for families with kids in college and parents working to provide a degree of financial freedom to those young adults but help prevent them falling into habits that will quickly result in a bad credit status: combining electronic banking and this generation's skill with computers and their ability to interact easily with resources made available via the Internet and the ease with which they use specialized mobile apps.

St. Clairsville resident Randy Greenwood is Executive Vice President and Chief Financial Officer at The Citizens Bank, headquartered in Martins Ferry. He is also the father of a college freshman, providing him a very real perspective on the challenges families deal with on a daily basis when it comes to helping children develop good financial management habits for their college experience and beyond.

Greenwood and his daughter have found that by them both having access to an account established for her use while at college, regular monitoring of the transactions and balance information provide a real-time view confirming the account balance, as well as what is actually available to spend if needed, has already proven highly valuable in avoiding financial frustrations that would accompany overdrafts and similar situations - situations no one enjoys having happen.

"Our Freedom Card program and other electronic banking services we can offer make it easy for families to continue to bank with a local company while having access to the resources of things like a large network of ATMs where they are convenient for the student to access," offered Greenwood. "On a college campus, it seems wherever you go, there are ATM machines."

There are lessons large and small to be aware of, he noted, pointing to things like ATM fee policies and the practice of assessed fees for transactions under $50.

"That can quickly get very costly for college students, as they tend not to take out large sums at one time, meaning frequent trips to the ATMs become habit and usage fees mount up," explained Greenwood.

Companies like Citizens Bank have established a policy of seeing to it that the fee a student is assessed for extracting under $50 from an ATM of another company's is refunded to them by the local bank, negating the usage fee.

"Because we offer this service, our customers don't have to go looking all over the place to find an ATM with the lowest fees charged for withdrawing less than $50," he said.

Both as a banking professional and as a father of a college student, he cautions against automatically deciding to purchase something over the Internet that seems almost too good to be true and is being offered through a site you don't readily recognize as having a solid reputation.

The debit cards get high praise across the nation's banking industry as a good way to help students effectively manage their money without worrying about the hassles of writing checks for day-to-day purchases.

A key to this format being successful is students need to keep track of how they use the card, either by keeping a running total or regularly reviewing their online statements.

Another plus: debit card users can set up email alerts as notifications when a balance runs low.

College students wanting to establish a credit history during those years can apply for a secured credit card and manage it independently while a parent can serve as a joint account holder.

Secured credit cards help build credit by reporting one's payment history to the credit bureaus. They do differ from unsecured cards and require a security deposit, which becomes the credit line. Parents who are co-users of their child's secured card would have access to that account but could choose not to use it.

One of the biggest cautions to share with families as the college year gets underway is the deluge of applications for credit and debit cards of various types of companies. These are often seen in large numbers at college registrations and orientation opportunities.

"Companies will offer the students applications and trinkets of one kind or another to sign-up and open an account," said Greenwood, reflecting the value of learning to save by deciding not to overspend in the first place. "And these companies are actually focused on inciting students to overspend, when that kind of habit can have a devastating effect on their future financial well being."

By practicing these and other money-management skills, and by allowing your college-bound son or daughter how to manage money before leaving for school, you can help lessen the sometimes harsh blow of financial freedom.

Loccisano can be reached at kimfromthetl@gmail.com

 
 

 

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