To help you avoid these missteps, Yahoo Finance talked with Lee Gordon, CEO of the Wealth Advisors group at Mesirow Financial. Gordon shares some key steps you should take before your child officially leaves the nest.
Create a power of attorney
This may sound unnecessary, but it will certainly come in handy if your child falls ill. While many of us still consider our college freshmen to be kids, most are 18 years old, which legally makes them adults. Because of HIPAA laws passed in 1996, medical records and health information are closely guarded. This means that health care providers may not inform you if your child is struggling with physical or mental illness.
The first step is to talk to your child about his or her newfound rights as an adult. But many young people don’t understand that they now have ownership over their health and education records.
If your child still wants your guidance when it comes to their health decisions, having a durable power of attorney assures that you will receive updates from doctors if your kid is sick or injured.
“It’s very frustrating as a parent to not know what’s happening with your child,” Gordon told Yahoo Finance. “But it’s an easy thing to prevent.”
A durable power of attorney goes into effect immediately and can be obtained in a couple of ways. A family lawyer can easily help you get the proper paperwork, or you can go to U.S. Legal Forms and download documentation. Free forms can also be found here.
Get access to tuition information
After enrolling in college, each student is given access to a site that lets them view tuition payments, loan disbursements and scholarship awards.
This is convenient, but let’s be honest, a lot of college students aren’t the best when it comes to managing money. Even though all of their financial information is in one place, there is still a chance that they won’t pay their bills on time and late fees will start rolling in.
If you are helping your child pay for college, or just want to help your kid stay on track, it’s crucial that you get access to his or her tuition information.
“This allows you to review the bill, ensure that scholarships have been credited properly and that financial aid has been applied,” said Gordon. “Just ask your child for the login information instead of wishing and praying that they’ll forward it to you.”
Discuss credit cards
College students are inundated with credit card offers on college campuses. Some of the sign-up offers are enticing, and if your kid hasn’t been properly educated, he or she could land themselves in debt by Christmas break.
According to Gordon, it’s not a question of if your child will sign up for a credit card, it’s when. Instead of waiting until it’s too late, have a conversation with your child and explain how interest rates work, point out annual fees and discuss the penalties that can incur if he or she makes a late payment.
After your child knows the rules, try picking out a card together. The important thing here is to make sure the account is under your teen’s name. Helping your child build a strong line of credit will give him or her the tools to develop a healthy financial future.