Financial Professional Dale McCarty

College students will soon be heading to their college towns and dorms, and many will be on their own for the first time. Financial professional Dale McCarty of Retirement Designers Financial gives some advice for parents to help guide their kids, who will soon be financially independent.

1. Young adults heading off to school will be faced with budgeting, credit card offers, and student loans. What are some of the biggest mistakes you see college students tend to make when they reach campus town?
- Students and families typically forget to budget. That can be a big one. Taking into account all of the extra expenses for food and fun can impact your bank account pretty quickly.
- Another one is not building credit, or if you get a credit card – students might rack up credit card debt, thinking they will pay it off.
- Not considering the cost of school. Think about cost of books, and other academic expenses.
- Try and plan for loans, and what the year or the next 4 years, will cost. Families sometimes forget to factor in cost of living, like apartments, gas, and traveling home for holidays, etc.
- Try and borrow only what you really need when it comes to student loans.
- We want to try and avoid money mis-steps so you don't have significant debt when you leave school.

2. How would you recommend setting up a budget to a new student?
- One good idea for starting a budget is to work backwards. Start by figuring out what expenses you have on a monthly and yearly basis. After you have accounted for all of the necessities, like cost of books and housing, figure out how much you have left over and begin to prioritize your remaining expenses. Finally, allocate money to your list of priorities based on your preferences.
- Another important step is tracking your expenses. Having a budget is one thing, checking-in and making sure you are sticking to it is another. Regularly confirming that you are sticking to your goals will help you stay on track or make any modifications if necessary.

3. Why is establishing credit in college so important?
- Establishing credit early will help students have a healthy credit score when it comes time from them to purchase their first car, apply for an apartment or purchase their first house. Because a major factor in determining a credit score is the average length of credit history, the earlier a student is able to get started the better.
- In addition, helping to get your student set up with a credit card that has a low balance will help teach them some good basics of credit. Though their first card, you can teach them the difference between needs and wants – charge what you need, and only things they can pay off at the end of the month.

4. How can students misjudge the cost of college?
- One thing that might happen, is parents and students typically plan for 4 years of school. Taking longer than four years to graduate can add to expenses.
- In addition, students frequently misuse student loans to purchase things that are "wants" not needs. Purchases like these can quickly rack up additional debt that you will have to pay back after college.