Good money skills start with straight talk

Congratulations – your pride and joy is getting ready for college. But how prepared is your child to achieve financial independence in the coming years? This quiz can help you find out.

1. When did you start teaching your child about finances?

a. In high school
b. In middle school
c. Not yet

2. How many of these concepts have you explained to your child: interest, credit ratings, loan payment schedules?

a. All three
b. One or two
c. None

3. Did your child buy a car in high school?

a. Yes
b. No

4. Do you have open discussions with your child about money – including your own financial struggles and limitations?

a. Yes
b. No

5. What advice have you given your child about credit cards?

a. Get as many as you think you need
b. Get one and use it wisely
c. Avoid credit cards entirely
d. We haven’t discussed it

6. Have you helped your child seek out and apply for scholarships and loans?

a. Yes
b. No

7. If a four-year college costs more than your child can afford, have you discussed community college?

a. Yes
b. No

Answer Key

Give yourself one point for each correct answer.

1–b Experts say that parents should start discussing finances as soon as their kids are old enough to understand.

2–a Don’t overestimate your child’s financial knowledge – even basic concepts like interest are confusing to many students. Take the time to explain financial concepts to them yourself.

3–b Money spent on major purchases like automobiles is money that’s not available for college. A students’ first car often requires frequent repairs, eating up even more of their hard-earned cash.

4–a Money spent on major purchases like automobiles is money that’s not available for college. A students’ first car often requires frequent repairs, eating up even more of their hard-earned cash.

5–b One credit card is plenty, in case of emergency or situations that require it. But multiple credit cards can lead to a false impression that you have more money than you really do.

6–a Parents can walk their kids through scholarship and loan applications, clarifying confusing terms and making the process seem less intimidating. Paperwork isn’t fun, but it’s definitely worth their time.

7–a From an employer’s perspective, where you started college matters less than where you finished. With the continued rising costs of college, attending a technical or community college is a very smart option. If a student spends their early years in a technical or community college, then moves to a four-year university to get their bachelor’s degree, the total cost of that degree is significantly less.

Scoring 

6–7 points: Good job! You’ve prepared your child well for the financial challenges ahead.

4–5 points: NNot bad, but a bit more financial dialogue wouldn’t hurt.

2–3 points: It’s probably time for a serious conversation about money.

0–1 points: For your kid’s sake, talk to them now – before they get their first credit card!