Just because they’ve left the nest, your kids don’t necessarily have their finances under control. They will need help navigating the world of money well into young adulthood, and college presents a natural opportunity to learn more and move forward. Read how to help your child at every stage of life in Make Your Kid a Money Genius (Even If You’re Not) by Beth Kobliner.
These are not the years a kid will build up a big nest egg. Much of what he has saved will go toward education costs, as well as the basic expenses of college life. Saving beyond that? It’ll have to wait until after graduation. Still, the following advice holds.
Use some savings to chip in for college costs. As mentioned earlier, research shows that if your kid contributes a bit of money toward college, he’s likely to do better in school because he feels more engaged and invested. Whether he’s covering the cost of books, his dorm room decorations, or a portion of tuition, having him dip into his savings to chip in is smart. And if you took my advice in the high school section and had your kid save for college, he should have at least a small amount that he can pitch in.
Save during the summer if you can. Summers are a prime time to earn. Money saved will give your kid breathing room during the school year, when he really needs to study and wants to work less, or it can allow him to take on less student-loan debt. If your kid ends up doing something over the summer that doesn’t make money (like an unpaid internship), be sure to remind him of the opportunity cost of that decision. It likely means that he will be working while in school, instead of relying on money he saved from his summer paychecks.
One other note…don’t tell your child to follow their dreams.