Don't Let College Give You a Money Hangover

Across the country, an annual ritual is in full swing: Parents releasing their young into the real world -- the accredited, admission-based, loosely supervised, GPA-focused, all-nighter-pulling college version of the real world, that is.

For most teenagers (they are technically still teens), this is the first time they will face bonafide adult situations on their own.

So, parents of soon-to-be-minted co-eds, have you had "the talk"? You know, that awkward discussion about protection, safety, responsibility, and the long-term consequences of their young-adult actions?

You know we're talking about money stuff, right?

Personal Finances 101: Oof, that's gonna leave a mark
Bills, budgets, lines of credit -- pick your poison. In the hands of lightweights, these things can turn into a potent cocktail setting off a financial hangover that can linger for years.

Overindulgence, abuse, cluelessness … remember the first time you were left to manage your money without a babysitter? Actually, please share! Reminisce in the comments section below. (Seriously, it's been long enough that we can all laugh uncomfortably at our own youthful financial indiscretions, right?)

Sadly, not much has changed since a lot of us whiffed on Personal Finances 101: Mastering common money tasks is still not taught in most schools. Even if not completely absent from the curriculum, practical hands-on financial lessons are either glossed over or crammed into a couple of rote exercises in an economics class.

That leaves kids these days learning money lessons the old-fashioned -- and very expensive -- way: At the school of hard knocks.

How to kick off "the talk"
Unless you want to be The Bank of Mom and Dad forever, have the "birds and bees" money talk before it's too late.

Don't worry if you feel ill-equipped to school your offspring about this stuff. You probably know more than you think you do, and you definitely know more about managing money than they do.

Counter eye rolling and the glazed stare of indifference with a few anecdotes about how boneheaded you (or any relative not within earshot of the discussion) were when first encountering all this stuff. 'Fess up to your youthful overindulgences. Cop to the pizzas you put on plastic that, with interest, ended up costing $1,000. In other words, be the cautionary tale.

Attention students (and parents): Money 101 is in session
While your kids set off to enrich their minds, we want to make sure they aren't bankrupting their futures (or The Bank of Mom and Dad, for that matter). We're covering the essential money lessons that will help them ace college finances.

Get started with these topics. And please share with us in the comments section what money lessons you wish you had learned before you were handed the keys to your financial future.

Fool.com's Dayana Yochim graduated college (Rock Chalk Jayhawk!) with only minor financial bruising, thanks to in-state tuition and the lack of plastic in her wallet. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 26, 2010, at 1:15 AM, dgmennie wrote:

    Currently, many college grads face a lack of worthwhile job offers. Combine this with record student loan debt and the result is not pleasant. Everywhere the bloated Education Establishment is pitted against students, parents, and overwhelmed taxpayers.

    The fact is, despite a long-held belief that good grades and college educations are the pathway to career success, we are now seeing that this whole concept has been oversold and oversubscribed. This means that all the tax money currently going into juiced-up public education and the massive student loans taken on in pursuit of any advanced degree may be (mostly) for naught.

    Frankly, I think it would be far better if public schools concentrated on the basics and dumped the enrichment, special-ed, and extracurriculars while being obligated to truthfully advise teens and parents alike about what jobs really exist for someone investing in college. The taking on of huge debt to chase limited "professional" career opportunities depends upon cultivated ignorance plus an overabundance of hype. Most college graduates, regardless of innate talent, are never going to be partners in law firms or ranking players at investment banks no matter what academics they pursue. Thus any implied promise from academe of lucrative post-graduation employment should be viewed with great skepticism. A lotto prize for the lucky few perhaps, not a predictable way for most grads to repay their crushing student loans.

  • Report this Comment On August 26, 2010, at 1:22 AM, dgmennie wrote:

    Currently, many college grads face a lack of worthwhile job offers. Combine this with record student loan debt and the result is not pleasant. Everywhere the bloated Education Establishment is pitted against students, parents, and overwhelmed taxpayers.

    The fact is, despite a long-held belief that good grades and college educations are the pathway to career success, we are now seeing that this whole concept has been oversold and oversubscribed. This means that all the tax money currently going into juiced-up public education and the massive student loans taken on in pursuit of any advanced degree may be (mostly) for naught.

    Frankly, I think it would be far better if public schools concentrated on the basics and dumped the enrichment, special-ed, and extracurriculars while being obligated to truthfully advise teens and parents alike about what jobs really exist for someone investing in college. The taking on of huge debt to chase limited "professional" career opportunities depends upon cultivated ignorance plus an overabundance of hype. Most college graduates, regardless of innate talent, are never going to be partners in law firms or ranking players at investment banks no matter what academics they pursue. Thus any implied promise from academe of lucrative post-graduation employment should be viewed with great skepticism. A lotto prize for the lucky few perhaps, not a predictable way for most grads to repay their crushing student loans.

  • Report this Comment On August 26, 2010, at 1:41 AM, BurntTiger wrote:

    enlist.....

    GI bill...plus you will learn real life lessons that you will not forget and are the most useful (IMO) for the rest of your life.

    That's what i did/am doing

  • Report this Comment On August 26, 2010, at 9:12 AM, StockGoddess wrote:

    When I was 12 my mom showed me how much more you pay for something when you pay interest. Then she told me to NEVER EVER carry a balance on a credit card or I'd live my life in golden chains. It stuck.

    That was more than most people get.

    I worked full or part time my entire college career. I hear much about the "job market" but my non-college-educated niece seems to be able to quit old jobs and pick up new ones effortlessly. (not that she should....). The type of jobs college kids want - waiting tables, burger flipping, retail - those jobs are still out there.

    i was a co-op student in a factory, a secretary, a real estate salesperson and a waitress during the five years it took me to get my four-year degree. Mom and dad contributed maybe $2K a year.

    I graduated debt-free.

    My advice to college students: Get a job. Don't worry if you miss the 4-year "deadline". Live cheap - at home or with roomates. Don't carry a balance on your Visa. And get a waitressing job - you won't go hungry if you do.

    You'll also appreciate your career more when you get there.

  • Report this Comment On August 26, 2010, at 10:05 AM, jc09058 wrote:

    When I re-enter college, as an adult student, after 6 years in the military, I had dealt with most of the lessons of financial life in the school of hard knocks. Not that my parents didn't tell me a thing or two dealing with money but national credit cards were still a fairly new thing and therefore something that was never covered.

    Luckily, college and it's bills were not so much of a bitter pill to swallow thanks to the GI Bill and having a military skill that translated to a needed civilian skill which allowed me to get, what was then, a high paying student job. That allowed me to enjoy the benefits oF paying for insurance, having a car and it's payments, a credit card, renting an apartment, food and some travel. Life was good and at graduation, I was able to do "The Impossible" of having my degree and absolutely no college debt.

    None of this could of happen the way it did without learning the skills of budgeting. Granted, my parents did teach me some of those skills but handling a credit card was the worst. That was a constant drain on me over time because I had not learned about interest and time payments. When I had my first accounting course, I discovered the nightmare and what it really meant. Six months of paying every cent I could, I finally paid it off and discovered something wonderful. I ran out of month BEFORE I ran out of money for the first time in my life.

    You can figure out the rest of the story from there but one of the hardest and most important lessons of life was finally learned.

  • Report this Comment On February 02, 2011, at 8:14 PM, mjturner1 wrote:

    All these are great stories to hear. I wish I had been so lucky.

    I went to a small, private liberal arts college. I always had a job and always had a credit card. I never kept a balance on the credit card because I knew how crushing interest was.

    After graduating, however, I found myself with $70k in student loans... most of it private with interest rates around 6.8-8.6%. Absolutely ridiculous.

    When all is said and done I will pay well over $100k for 4 years of college and a semester abroad in Australia. I currently work an entry level night-shift biotech job making $40k a year and can hardly afford rent. My dad still pays my car insurance and cell phone bill and he is filing for bankruptcy.

    Would have been great to have realized that student loan interest is just as big an issue as credit card interest.

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