How to Prepare Your Student for Managing Finances in College 

College Life Comes with Big Financial Changes 

Sending your student off to college is a proud moment—and a big transition. From new roommates to tougher classes, there’s a lot for them to navigate. Often times, one of the biggest challenges is having to manage their money on their own for the first time. 

With a little planning and financial education, you can help your student avoid common money mistakes and build good financial habits that stick with them for life. 

Why Financial Education Matters Before Move-In Day 

College is often the first real test of financial independence. Without guidance, students can quickly find themselves buried in credit card debt or unsure how to manage their student loans. Credit cards should not be discouraged for students because they help protect purchases and build credit when used responsibly. 

By helping your student navigate the basics, you can set them up for positive lifelong financial habits. Let’s breakdown how. 

Start with Budgeting Basics 

A solid budget is the foundation of smart money management. Sit down together and figure out: 

• What income they’ll have (loans, parental support, a part-time job) 

• What their monthly expenses look like (books, rent, food, fun) 

• What they can reasonably spend  

• Their personal savings 

👉 Download our free College Budget Sheet PDF to make this step easier. 

Banking & Credit 101: Setting Up Smart Accounts 

It’s more than just opening a checking account. Help your student choose accounts that work for them: 

• A checking account with no hidden fees: Check out our Connect Checking Account 

• A savings account—or even better, a high-yield money market account to grow their savings: Honor Money Market Accounts 

• Access to digital banking and mobile transfers (Honor’s app makes this seamless) 

💡 Pro Tip: Encourage them to keep only what they need (plus a buffer) in their checking account and move the rest into savings or a money market account. 

What about credit cards? 

A credit card when used responsibly can be a great way to build credit. Teach your student to: 

• Only charge what they can pay off each month 

• Use it for protected online purchases 

• Use it for necessities like gas and groceries 

• Monitor their balance and payment due dates closely  

Building credit early will help them when it’s time to rent their own place or apply for utilities. 

Pro Tip: It is easy to monitor your credit card balance and purchases on the Honor App 

Smart Spending Habits Start Now 

Once they’ve got a budget, it’s time to talk about how to spend wisely. 

Teach them the “need vs. want” rule. 

That daily latte or weekly concert may seem small—but they add up fast. Encourage them to ask: 

👉 “Do I really need this, or do I just want it?” 

Also, remind them not to fall into the comparison trap with friends who might be spending more. 

💡 Pro Tip: Take advantage of student discounts, free events, and campus resources. And if they’re on a meal plan—use it! 

Avoid “lifestyle creep.” 

Even if your student starts earning a bit of money, that doesn’t mean they should spend more. Help them recognize the difference between growing income and growing needs. 

Should Your Student Work During College? 

A part-time job can teach valuable lessons—but it’s important to find the right balance. 

Things to consider: 

• Is the job flexible around classes and study time? 

• Is the pay worth the hours? 

• What’s the goal for that income: spending money, savings, or loan repayment? 

Set expectations early. Are you covering basic expenses? Should they save for extras? Clear communication leads to fewer surprises—and more responsibility. 

Talk About Student Loans Early 

Before they even choose a school, your student should understand how student loans work—and how they’ll repay them. 

Loan terms to explain: 

• Interest – The cost of borrowing money. Interest can be fixed or variable. 

• Deferment – A pause on payments, usually while in school, but interest may still accrue. 

• Repayment – Encourage them to make payments early (even small ones) to avoid a debt snowball later. 

Tools and Resources to Help 

Set your student up with helpful tools: 

• Budgeting apps like Rocket Money or Credit Karma 

• Student Aid Estimator: to get a sense of financial aid 

• Honor’s Moneymap Tool – A free feature in the Honor app that helps track spending, create budgets, and manage debt all in one place. 

Support Along the Way 

Let your student lead but offer guidance along the way. 

• Share how you manage your money 

• Keep the conversation open and judgment-free 

• Help set goals and even a monthly budget check in 

If you’re helping financially, consider giving them a monthly or semester budget. Let them be responsible for staying within it. It’s a great way to build trust and financial maturity. 

Financial Confidence Starts with You 

Managing money in college can be overwhelming—but with your support, your student can thrive. By teaching them how to budget, bank smart, and make mindful choices, you’re not just preparing them for college you’re preparing them for life. 

Keep the conversation going. Encourage them when they stumble. And celebrate the wins (like paying a bill on time or sticking to a budget). 

Because financial confidence is one of the best parenting wisdoms you can give.