Financial Help College Students Need
With rising inflation and an uncertain economy, more college students and recent graduates are pinching pennies to make ends meet. A recent survey from Neighbor.com found that nearly half (47%) of college students either don't have a savings account or have one but have no money in it.
Many students are leaning on family and friends for financial help, especially during graduation season. As essentials like gas and groceries increase in price, they’re being hit especially hard since many are already strapped for cash or working lower-paying part-time jobs. In addition to their full-time commitment to school, three main factors contribute to their financial struggles:
The Neighbor.com survey points to many college students not having savings accounts. This means they lack funds for emergencies and are not building their financial future to be prepared for life expenses post-graduation.
- Gig Work
To make extra cash, 34% of college students and recent graduates do what’s called gig work – jobs like freelancing and food delivery that give them flexibility around classes. However, gig jobs may not provide enough income and are inconsistent regarding scheduling, benefits, and a steady paycheck.
- Relying on Family
73% of college students say they have relied on their parents to help them financially when they’re in a tough spot. Without this support, many wouldn’t be able to make ends meet while staying in school. Yet many families struggle financially to take on the extra expense in today's economy.
How You Can Provide Support to College Students
Alleviating financial hardship for students helps them focus on class assignments and job searches. However, it’s important to note that college students aren’t the only ones dealing with steep inflation. Make sure you have a steady handle on your own finances amid rising costs – but if you CAN help, there are several smart ways to do it:
- Explore Credit Education with Them
Learning how credit cards work and the importance of building good credit is essential for any adult on a path toward financial success. An estimated 30% of Americans don’t get a credit card until after they’re 21, so many college students and graduates don’t have much experience with credit. Helping your student open a credit card and teaching them the do’s and don’ts will give them a great starting point to build their finances. Look for a low-interest credit card with no annual fee to help them get started.
- Set Up a Meeting with a Financial Advisor
You don’t have to wait until you’re making big bucks to speak with a financial advisor. For college students or recent grads, a financial advisor can help them set realistic goals for the near future and guide them to resources that would benefit their unique financial path.
- Make a Student Loan Payment for Them
Student loan payments are a heavy burden that can follow people for years. Helping your college student get ahead on their loans is a great way to take pressure off their finances. Most student loans have a grace period of around six months after graduation before their first payment is due. Making payments for them during this time reduces their balance and could reduce their payment amount when they come due.
Helpful Gifts For College Grads
While gifting cash is easy, giving something useful for their current situation is also a great idea. Here are a few gift ideas they can use to get ahead, including short-term and long-term gifts:
- (Short-term) Gas Gift Cards
As gas continues to stay at record-high prices, helping students with this cost is a great gift. Gifting one or more gas cards can help your college student or grad save money on travel costs – whether they’re visiting family, commuting to work, or moving to a new city post-graduation.
- (Short-term) New Apartment Essentials
Alleviate the pain in your student’s wallet by purchasing home starter essentials. From cooking utensils to furniture, getting an idea of what will help them the most will make the most significant difference.
- (Long-term) Investments
Many graduates get an influx of gifts right after graduation but return to the humble life of just starting in the real world. Consider investing your gift into a Certificate of Deposit (CD). As interest rates are beginning to rise, CD rates are also rising. You can set specific terms for as little as one or two years. Bonds are also helpful for a college grad and will come in handy when it’s time for big purchases like a car or a home.
Above all else, we recommend asking the college student in your life what will help them the most. Everyone’s situation is different, so it’s important to get a personal insight into what they need help with to give them the most appropriate gift.