When your child first started school, you doled out the change for milk and a snack on a daily basis. But now that your kindergartner has grown up, it's time for you to make sure that your child has enough financial knowledge to manage money at college.

Budgeting 101

Perhaps your child already understands the basics of budgeting from having to handle an allowance or wages from a part-time job during high school. But now that your child is in college, he or she may need to draft a "real world" budget. Here are some simple ways to help them plan and stick to a realistic budget:

• Help them figure out what income there will be and when it will be coming in.
• Make sure they understand the difference between needs and wants.
• Determine together how you and your child will split responsibility for expenses.
• Warn them not to spend too much too soon, particularly when money that must last all semester arrives at the beginning of a term.
• Acknowledge that college isn't all about studying but explain that splurging this week will mean scrimping next week.
• Show them how to track expenses by saving receipts and keeping an expense log.
• Encourage your child to plan ahead for big expenses by setting aside money on a regular basis in advance of the expense.
• Caution them to monitor spending patterns to avoid excessive spending and ask them to come to you for advice at the first sign of financial trouble.

You should also help your child understand that a budget should remain flexible; as financial goals change, a budget must change to accommodate them. Still, your child's ultimate goal is to make sure that what goes out is always less than what comes in.

Opening a bank account

Ideally, a checking account should require no minimum balance and allow unlimited free checking; short of that, look for an account with these features:

• A simple fee structure
• ATM or debit card access to the account
• Online or telephone access to account information
• Overdraft protection

To avoid debit card denials or bouncing checks, it's essential to monitor their account balance and be aware of any automatic payments.

Encourage your child to open a savings account too, especially if they have a part-time job during the school year or summer. Your child should save any income that doesn't have to be put towards college expenses. After all, there is life after college, and while it may seem inconceivable to a college freshman, they may one day want to buy a new car or a home.

Busey offers multiple checking and savings accounts designed to fit your needs.

Getting credit

Yes, your child can get a normal credit card as a student. Students can get any general consumer credit card as long as they are at least 18 years old, have enough income to afford minimum monthly payments and meet any other requirements the card has for approval. Students can list actual income from a job, regular bank deposits from family members or leftover financial aid as their income on a credit card application. Credit cards branded as student credit cards may sometimes have flexible credit requirements for approval, but usually feature lower credit limits and can have average to high annual percentage rates (APRs). However, the student can apply on his or her own and, with proof of college enrollment and some income, they can typically earn approval.

A credit card can provide security in a financial emergency and, if used properly, can help your child build a good credit history. But the temptation to use a credit card can be seductive, and it's not uncommon for students to find themselves over their heads in debt before they've declared their majors. Unfortunately, a poor credit history can make it difficult for your child to rent an apartment, get a car loan, or even find a job for years after earning a degree. And if you've cosigned their credit card application, you'll be on the hook for your child's unpaid credit card debt, and your own credit history could suffer.

Here are some tips to help your child learn to use credit responsibly:

• Get a credit card with a low credit limit to keep credit card balances down.
• Consider a secured credit card.
• Review each credit card bill and make the payment by the due date.
• Encourage them to pay as much as possible if they can't pay the bill in full each month.
• Notify the card issuer of any address changes so they will continue to receive statements.

Finally, remind your child that life after college often involves student loan payments and maybe even car or mortgage payments. The less debt they graduate with, the better off they will be.

Financial Pathways

Busey’s commitment to bettering the communities it serves includes providing expansive access to financial education tools. We’re pleased to offer Financial Pathways, a financial education platform which provides an engaging learning experience through a series of targeted modules, to our customers and communities.

With over 250 educational experiences available, the relevant digital programs are designed with community members and 7^th through 12^th grade students in mind. Programs covers a wide variety of topics—from building financial capability and owning a home to preparing for retirement and investing in the future—and each lesson ranges in length from 5-10 minutes. To learn more about Financial Pathways, visit Busey’s complimentary financial wellness center at busey.com/FinancialPathways.

As you prepare for the future, Busey Wealth Management’s team of over 130 financial professionals is here to help. For more information on our services, visit busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.

Investment products and services through Busey Wealth Management are:
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