When Claude “Wesley” Gallaher was 7 years old, he didn’t understand why he had to put all his money into the bank instead of a box. But 10 years later he knew why when he wanted to buy a car and saw his account balance with more than enough for the down payment.
“I explained to him that banks are where you put money to keep it safe, but he wanted to hoard his money in a box,” said Gina Gallaher, his mother. “At 17 when he saw what was in the bank, he finally understood where his Christmas money went all those years.”
Wesley, now a student at West Virginia University, learned a valuable lesson from his parents, but that’s not always the case. Less than half of parents or guardians teach their kids how to manage their money, according to a Financial Industry Regulatory Authority study. On top of that, one in three young adults had no financial education in high school or college.
The added weight of money mistakes can stay with students for a long time and can be hard to shed. But luckily, those costly errors are easier to avoid thanks to advice from Mom or Dad, some common sense and handy help from banks like PNC:
The National Financial Educators Council found 19-24 year olds have low financial literacy. Fifty-one percent believe a personal finance class in high school would have helped them prepare for life.
Whether there is a formal class or not, parents can help children understand that bills, budgets and payments recur every month—and the money has to come from somewhere.
“My parents taught me to always write down everything, keep my receipts and make sure my checkbook balances,” said Krystale Russell, a student at West Virginia University. “My dad was on my first checking account, but he let me run it myself to learn first-hand and better myself for future life goals.”
Now Krystale does everything online, but still follows the same concepts her dad taught her.
“I set up weekly bills and check my bank account every day via my phone to make sure everything is in order,” Russell said.
Textbooks, rent and school supplies may be essential to college life, but student Agupunam Ufondu likes to enjoy himself outside of class at West Virginia University.
“I like to go out downtown in Morgantown, take in local events and play video games,” Ufondu said. “My high spending categories are always food and entertainment.”
Ufondu uses PNC Virtual Wallet Student® to have a clear view and control of his money. Features include a calendar customized for students, mobile and text banking. Parents can get alerts to track their child’s account, while still letting them figure things out on their own.
The “Reimbursements” feature enables your student to send a receipt and ask if you’ll pay. So you can see what that $50 for school supplies really went to. When enrolled “Parent Alerts” allow you to see the same e-mail notice your student gets when the account balance is getting low.
"Virtual Wallet Student helps students save and spend smarter, with tools like mobile and text banking," said Mike Ley, vice president of e-business and payments at PNC. “It allows them to be financially independent, but has features that allow parents to intervene if there’s trouble.”
Out of 2.6 million PNC Virtual Wallet® users, about 738,000 are student. Students can avoid the monthly service charge for Virtual Wallet Student with proof of active student status for six years.
Working with various schools, PNC’s university banking team also hosts financial education seminars on certain campuses. Topics include Banking Basics, Budgeting, Identity Theft, and Protecting their Credit. Parents, meanwhile, can turn their own observations into lessons.
“Wesley needs to build something for the future,” Gina Gallaher said of her son. “We’ve openly talked to him about our finances, such as our 401k, and how we track them so he knows how important it is.”
Parents can help their child living away at school by teaching the difference between wants and needs. Questions to ask include: is the item well-made or will it last? Can you live without it? Is it really worth the price?
Students might want expensive new textbooks, but a used or rental book could fill the need just as well. Parents can also encourage students to take advantage of free food, entertainment and giveaways on campus.
Students also can earn spending money through work/study positions, internships or assisting a professor. This can prevent them from dipping into savings while helping them build funds for the future.
For the Gallahers, the tables have turned from when their son was little.
“Wesley is part of the generation that can just zip a card through,” said his father, Wesley Gallaher III. “We’ve taught him that piece of plastic doesn’t come automatically loaded with cash. We let him know that the image of swiping a card through a machine is not just mom and dad paying for something.”
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