As the school year begins, many parents are sending their new or returning college students off to dorms and campus apartments, where they may have more financial responsibility than ever before. Are they prepared? Here are a few tips to help make sure they are ready to manage their finances with confidence.

ONLINE BANKING

Many of us have been using online banking for years, and it has become second nature. But does your college student know the basics? College students should have a checking and savings account, with debit card, before heading off to school. Sit down and create their online banking profile through your bank, and make sure they know the basics like how to balance their account, look for fraudulent charges, deposit checks electronically, pay bills online and transfer money from one account to another. Don't forget to check your bank for any transfer limits on their accounts. Also teach them how to protect their banking information. Remind them to never access banking information on a computer or smart phone when they are on unsecured wifi and to password protect both their phones and computers in case of theft.

BANKING IN PERSON

Even though banking is done largely online, there still may be occasions your college student finds a need to access a physical branch. Make sure to take them inside their bank and show them where the deposit slips, tellers and other services are located. Also show them how to use the drive-thru at their branch. Additionally, if they have never done it before, teenagers may be nervous about using an ATM machine, so walking them through that process can be helpful. Make sure to remind them how to stay safe while accessing an ATM; not using an ATM at night alone, never writing their pin number on their card or in their wallet, being aware of their surroundings and quickly putting any cash away after it is dispensed. Remind them of any ATM fees your bank assesses, and make sure they know how to avoid those fees by using their bank locations or taking out enough cash for an entire week, rather than taking out $20 a day, for example.

BUDGETING

For many students, budgeting is a new responsibility when they head off to college. Sitting down with them and helping them create a realistic budget that accounts for bills (cell phone, car insurance, utilities, rent, food, clothing and car maintenance) can be eye-opening. Help them create a spreadsheet they can continue to work with in college. Don't forget to talk to them about the importance of building a savings account. Also encourage and teach college students about being thrifty shoppers; using off-brands, coupons, and buying things like school supplies when they see them on sale, instead of waiting until the last minute.

CREDIT

The average college senior will rack up about $4000 in credit card debt before they graduate. Many college students think you can build credit by racking up this debt, which is not exactly the case. Yes, having and using a credit card can help you build credit, but a good rule of thumb is to only spend 30% of your available credit every month, and to pay the bill in full each month. Remind them that paying credit card bills on time is imperative, and to not use credit cards as extra income but for building credit and true emergencies.

Also talk to them about the importance of knowing the interest rate or annual fees of any credit cards they apply for. Many college students apply for cards in order to get freebies like a t-shirt or free meal, only to realize the card has a heavy annual fee or an outrageous interest rate. Also make sure they understand that applying for tons of credit cards can lower their credit score as well. Sign them up for one of the services that offers a free credit score every month (many banks and credit cards offer this service to their members now) and teach them how to read their credit information and how to report an error if one occurs. Additionally, if they suspect credit card fraud, what steps to take to resolve the issue. AFI members can call 1-800-255-6792 if they suspect identity theft. We will connect you to your personal advocate who will guide you through the process of restoring your identity, credit and good name.

Additionally, all AFI members have free Identity Theft Advocacy Services through CyberScout, to include tips on keeping your identity safe, how to detect fraud and timely information on topics such as cyber threats, data breaches, and tax fraud. When you become an AFI member, your children are automatically members for life.

STUDENT LOANS

The decision to consider student loans is unique to each family and college student. Make sure to educate your child on the different types of student loans, their interest rates and their repayment requirements. Encourage them to seek your advice before deciding to take out a student loan in the future so that you can weigh all of the pros and cons together.

RENTER INSURANCE

Are your college student's belongings protected while they are off at college? Renter insurance can protect your child's electronics, furniture and other belongings from theft, loss or damage while they are off at college. Contact your AFI agent today to see if they will be covered under your current policy, or if they might need a separate, affordable policy of their own.