For a lot of parents, sending their kids off to college is a bittersweet experience. It’s a battle between being proud of their son or daughter for taking this next step and thinking back on how fast the time has gone—and how it seems like just yesterday that they were 2 years old.

It wasn’t that long ago that I was stepping onto a college campus for the first time, and I remember how thankful I was for the effort my parents put into preparing me for that experience. But I think a lot of teenagers head to college without any idea about how money works. Ten years from now, they’ll more than likely be loaded up with student loan bills. It’s a scary trend that keeps getting worse.

Don’t let that happen to your college kid. Help them understand these issues before they step into that first class.  

Budget, Budget, Budget. If you haven’t been using a budget, it will be difficult to convince your kid to use one. So start by making sure you understand budgeting and have begun to use it as part of your financial plan. Then, just walk them through the process—spending all of their money on paper and on purpose before each month begins. Everything should be broken into categories—food, gas, clothing, etc. 

Independence Means Responsibility. Stepping out on your own is a big deal, but it’s not all fun and games. Living away from home means you have to take care of yourself. Do your best to prepare your son or daughter for what that means. Food doesn’t just drop out of the sky, and gas doesn’t magically appear in their car. Independence means responsibility.

College Isn’t Cheap. Even if your kid is going to a small community college, they’ll still probably have a few thousand dollars of tuition to pay. If you break it down, one class can cost $1,000 at the very minimum! And that doesn’t even include books. That means skipping class or blowing off homework is a waste of money—and a big fat dent in the GPA.

Choose a Major Wisely. Help your teenager find his or her passion. This isn’t a must before they step on campus, but simply plant a seed that gets them started thinking about what they want to do with their life. You don’t want them graduating with a degree that leaves them unfulfilled or unable to find a job.

Friends Matter. New friends mean new opportunities and new social situations. Who you hang out with definitely influences how you spend money and the decisions you make. Without being overbearing, remind them how important it is to have positive friends who build them up instead of bringing them down.

If your soon-to-be college student doesn’t seem to care, it might just take them messing up a few times to understand how important it is to have a plan for their money. They’ll come around quicker than you think once they have that first-hand experience.

Remember, you can make all the right decisions and give all the right advice, and it’s still possible that they will mess up. As a parent, just be there for support and to reinforce these principles throughout their college experience.

Growing up as Dave Ramsey's kid, Rachel Cruze learned the basic principles of money at an early age. She travels across the country teaching those same principles, in a personal and passionate message of money and hope, to teens and young adults. Rachel’s also the host of Generation Change, a course that teaches teens about money and empowers them with the skills they need to become financially responsible adults. To find out more about Rachel, visit daveramsey.com/speakers or follow her on Twitter at @RachelCruze.

Publication date: June 18, 2013