June 2019 Newsletter

Dear Parent(s),

Shred the Debit Card

Beginning this August your student is going to need money for all sorts of indirect expenses. Many students use debit cards to pay for these items. But if you want an amazing graduation gift that won’t cost you a nickel, get them a credit card.

Here’s why: Your student could use a debit card every day of the year, but it won’t move the needle on their credit score one centimeter. Debit cards don’t build credit. Credit cards are a great way to protect yourself and your student from fraud, abuse, and unauthorized purchases. Apply for one in their name. Since they have no credit yet, you will guarantee the card and AND place a spending limit on it.

There are huge benefits to getting them a credit card:

• The bill comes to you, so you’re responsible for the bill. If they spend a lot of time in a bar, you’re going to know that.
• Whatever you budget for them to spend each month for books, supplies, travel, and personal expenses, that’s all they can spend.
• Every time you pay the bill, it will positively affect your student’s credit history.
• The gift of credit is a tremendous asset to give your son or daughter for graduation.
• They don’t even have to keep a balance on their card. The best thing is to pay it off every month, and that’s good enough to maintain a good credit score.
• If in the future they want to buy a house, a car, or a condo, they can do so without you having to be there to co-sign.
• Nowadays, everything is based on credit. Employers will check it and it will be checked every time they buy auto or life insurance.

Whose Job Is It Anyway?

When it comes to the college admissions process, parents of rising juniors often wonder what it is they should be doing, and what their student should be doing. Most of us like lists, so here are ways parent can help!

1. Become familiar with schools’ online data management systems on which the status of the college preparations and applications will be tracked.
2. Drive to college campuses.
3. Make hotel arrangements.
4. Investigate test prep options.
5. Register for the ACT/SAT.
6. Decide where to apply.
7. Provide application fees.
8. Provide moral support.
9. Prepare paperwork to file FAFSA, CSS Profile, and scholarships while your student prepares and completes the applications.
10. Keep track of online log-in and password credentials.

The Rude Awakening

You may think you know college is going to be expensive. But most parents have no idea just how expensive. That is until you really start looking at the price tags and figure out things such as your Expected Family Contribution or EFC, what the academic competition is at each college and how much they are willing to discount their price for a student like yours.

It’s up to you to understand each college and university’s admissions and financial aid policies. How much a college will want to invest in your child will vary greatly from school to school. For instance, at public universities your child may not be offered any discounts to lower the price. More competitive private colleges that have huge endowments will use your homes equity to lower the tuition discount he or she may be offered. It’s important to know how to value your home correctly to minimize the devastating effects to savings and investments! Some schools can also be influenced to drop or reduce the assessment of your home PROVIDED you know how to negotiate.


Well, that’s it for this month.

John Tillman

P.S. If you find this newsletter helpful to you please share it with other parents like yourself!