A few hundred miles into the drive from Massachusetts to North Carolina, my daughter Whitney asked if every parent taking their kid to college talks about “this stuff.”
No, they don’t. Then again, most kids don’t have a financial columnist for a parent.
The talk we had along the way to her small school in North Carolina was about financial consequences in a world where the naive are all too often prey for the greedy and the nasty.
In maintaining social media connections through much of the 16-hour drive, Whitney confirmed with friends that their parents had not had these discussions. And the more they heard from her about it, the more they seemed to wish their parents would have said something.
So, for parents who are sending children to college at this time of year, here are the financial topics I made sure my daughter heard from me before she set off on her own.
1. You’re not protecting your privacy – you’re safeguarding your future. Kids these days carry so much information about themselves on smartphones and in their wallets – and post so much online – that they fail to realize how those details can be used against them. Likewise, they have so many Facebook friends or Twitter followers that they are easy victims for phishing scams and fraudulent emails.
What’s more, it’s easy to put your guard down for someone who is linked to you because they are a “friend of a friend.”
When someone sees your phone and says it looks cool and asks to see it for a minute, don’t give it to them. Imagine what a bad guy can do with all of your information at their fingertips for just a minute or two. When someone volunteers to grab your mail, you’re giving them access to your first credit card offers or other personal information (papers you should also shred when you get rid of them).
Young people are the easiest marks for identity thieves, precisely because they are most casual about their information and because they don’t think they have anything worth stealing. Yet ID crimes are not about what someone has – they’re about what that someone can get away with.
2. What you say and do today could cost you tomorrow. Political candidates aren’t the only people facing scrutiny of every little thing they have said. So are students applying to graduate schools and kids looking for jobs. In a world where it’s hard to stand out from the next person trying to achieve the same goals, it’s important that you don’t stand out in a bad way, giving someone reason to give an opportunity to the other guy. You don’t need to broadcast every stupid thing you do in college. The world expects college kids to have the moments when they act like idiots; make sure your moments don’t last a lifetime. When in doubt, keep your escapades off Facebook and your comments off Twitter; that way, you will have nothing to regret later.
3. Emergencies get worse if you don’t plan for them. I asked Whitney before we left to give me her wallet, and then to tell me everything she had in it. She got most of it right, but not quite everything. I then asked if she knew whom to call if she lost her wallet. Then we made a copy of everything she carries. She also stopped carrying things she no longer needs, such as a reward card from a favorite frozen yogurt shop that could give an ID thief another entry point. The copies stayed at home, and the plan is that a lost wallet triggers the call home, where we can spring into action with account numbers and make the requisite calls to notify everyone.
We talked about all of the other potential scenarios for emergencies, and how she would handle everything from transportation troubles to emergency medical care to incarceration and more.
4. Don’t assume everything in the fine print is fine. Whether it’s a credit card offer, a chance to get some freebie while signing up for a subscription (where you can then cancel the service but keep the goody), some coupon deal, or a big-ticket purchase, the first lesson every consumer needs to know is that the fine print is there to protect the provider, and you can assume as the customer that all it really means for you is trouble. If a deal sounds great, read the fine print. That’s generally where you can find out the terms and conditions that could make it too good to be true.
5. Timeliness is next to godliness. Kids who get their first credit cards or have their first bills to pay seldom recognize that it’s far more important to make timely payments than to make big ones. Feeling a financial pinch, they will let a small payment slide, figuring that they can make a bigger payment later that will appease the lender or even satisfy the debt. They will ruin their credit record – and pay exorbitant fees – because what lenders judge you on most is not how much you pay back in any one shot, but whether you make payments when payments are due.
6. Money gives you choices. What you spend today has a direct effect on what you can do tomorrow, so use what you’ve got wisely. If you can’t remember what you have been spending your money on, you probably would have been better off not spending it.
Make sure the choice you make today with your money truly is worth it. If not, assume something more worthy will come your way and hang on to your cash until then. You’ll be glad you did.Chuck Jaffe is senior columnist for MarketWatch. He can be reached at email@example.com or at PO Box 70, Cohasset, MA 02025-0070.