How to Keep Your Kid From Becoming a Broke College Student

According to the National Center for Educational Statistics, 21 million kids will be heading off to American universities and colleges this fall. But with only four states requiring a high school course in personal finance, most of them will be woefully unprepared for the daily financial responsibilities they’ll face once they’re on their own for the first time.

However, by making use of some great educational resources and financial tools, students won’t have to learn about finances the hard way.

Educational Resources for College Students on a Budget

All the great tools in the world are worthless if you don’t know how or why you should use them. A survey by the Financial Industry Regulatory Authority found that 61 percent of respondents couldn’t answer three out of five simple financial questions correctly; what’s more, younger respondents fared far worse than older ones.

Students need to get educated about their finances if they hope to stay on top of them during college; luckily, there are an abundance of resources out there for students and parents alike.

A great place to start is Penn State University library’s Financial Literacy for College Students research guide, which is chock-full of links to resources on everything from budgeting to student loans.

Another great site is, a website run by the National Endowment for Financial Education, covering financial planning concepts for individuals and families. The site offers information on everything from apps to calculators and worksheets for budgeting. For starters, download this helpful guide: “40 Money Management Tips Every College Student Should Know.”

5 Best Tools for Money-Savvy College Students

Armed with information, there are a few tools that will help teach financial literacy to college students.

1. A Budget Service

Whether it’s a piece of notebook paper or a smartphone app (and we highly recommend the latter), having a budget is crucial — students can keep track of what they are spending and make sure there isn’t more month than there is money. is one of the most popular online and mobile budgeting tools for monthly and occasional expenses like books or that spring break trip that’s coming up. Here are a few other mobile apps that can help college students manage their expenses.

2. A Checking Account

Having a checking account with ATM access allows students to write checks, pay bills and access funds for other expenses without the danger of overspending. Parents can deposit money that the student can then use, and most banks have student accounts available that don’t charge fees for low balances. Watch out for overdraft charges and make sure your student knows how to balance a checkbook to avoid them. Also be aware of ATM fees, especially if your kid is going to school out of state. Make sure your banking institution has surcharge-free ATMs close to campus.

3. A Secured Credit Card

A great step toward building credit — but also limiting the ability to build up a lot of debt — many students opt for a secured credit card. These products require a deposit equal to your credit limit. Beware, however, the fees associated with some of these cards. Additionally, your student needs to know the importance of making regular payments — a secured card won’t build credit if it’s not used correctly.

4. A Credit Card

Once they’ve built their credit responsibly, many students opt for a traditional credit card to cover emergency expenses. Look for cards with low APRs and no annual fees. There are many comparison tools on the web to help you find the right card for your student; you can start your search right here at GOBankingRates. With credit comes responsibility, however; this is where those budgeting tools will come in handy, helping students keep from overspending and plan for larger purchases. It’s most important that students avoid racking up credit card debt.

5. A Stash of Cash

Smart students always have a stash of cash for emergencies. Even $50 to $100 squirreled away will come in handy when bank account funds are low, ATMs are inaccessible or there’s an emergency. What’s more, learning not to spend it all immediately is one of the best financial lessons a student can learn.

With some research and careful planning, students won’t have to learn financial lessons by messing up. They can end their college years with some financial knowledge, experience and a little credit, ready to take on larger money responsibilities as adults.

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