How parents can help college students manage money and avoid mistakes

Sending your child off to college is a big milestone, and for many parents, it’s the first time their teen will be managing money on their own.

Talking about money is important in Louann Millar’s family. Millar, who is leader of youth and student banking at Wells Fargo, has two teenagers who, as in many families, are very different in how they think about and approach money. “One of my kids is very eager to earn money and save up for what they want to purchase,” she said. “My other one lives very much in the moment and has a hard time thinking about purchases and things they might want tomorrow.”

Like a lot of other topics, it’s just important that your kids know they can come to you to talk about money and other things. “It’s important for our family to have these conversations together so that our kids understand how we prioritize money,” Millar said. “They might take some of that learning and use it in their own lives as they become independent.”

The 2025 Wells Fargo Family Banking and Allowance Study found that 85% of parents feel they should have more conversations with their kids about money, but almost a third of parents feel uncomfortable doing so.

“Money can be a tricky topic, especially if you don’t feel confident in your own financial skills,” Millar said. “Many parents worry they’re not equipped to teach smart money habits, but the truth is, you don’t need to be a financial expert to have meaningful conversations with your teen.”

Managing money is no different than any other life skill. “As adults, we’ve learned from hiccups we’ve had in our financial lives before,” said Millar. “So just like anything else, we can use this as a teaching moment.” Sharing what you wish you’d known at their age or pointing out opportunities to make better decisions can help your child avoid common pitfalls and build a stronger foundation for managing their own finances.

Encourage your child to ask questions, make their own decisions, and learn from both successes and setbacks. By modeling openness and a growth mindset, you’re helping them become money smart, even if you’re still learning yourself.

Millar tells parents to shop around for a student bank account just as you would for dorm essentials or school supplies — with both their own needs and their students’ in mind. She recommends comparing options to find one that offers the right mix of transparency, control, and convenience. Here are four things to look for:

1. Choose a student account with transparency and guardrails.

   Look for a student account with clear terms, practical tools, and built-in safeguards. For example, Wells Fargo’s Clear Access Banking®, accessible to primary account owners ages 13 – 24, offers features like mobile deposit and bill pay.

   Once the account is set up, encourage your teen to load their debit card to their digital wallet so they can pay for everyday things with their phone. You can feel cool by showing them how to use the banking app.

   Now consider what kind of oversight you’d like to have, such as visibility into spending and balances. It’s important to find a balance, allowing your kids to learn from their mistakes while still providing the necessary support and guidance. With joint ownership or authorization, you can monitor your teen’s bank account for fraudulent or suspicious transactions, or coach them to do so. This includes checking if their information has been stolen, spotting unauthorized charges, or identifying scams where they might be tricked into sending someone money. Consider joint ownership or authorization so you can monitor for fraud or spot unauthorized charges. Set up alerts to track deposits and low balances.

   Explain how to set up automatic payments for loans or rent.

   Make it a habit to check your bank account balance and transactions at least once a week. (Wells Fargo customers can do this easily through the Wells Fargo Mobile® app.) Set up alerts so you know when your paycheck comes in or if your account balance dips below the amount you specify.

   If your student will have a job, talk about using Direct Deposit as convenient, safe, and faster way to have their recurring paycheck automatically deposited into their account, so they won’t have to worry about checks getting lost, delayed, or stolen, or making a trip to the bank to deposit. (Note: Wells Fargo’s Early Pay Day feature can even make direct deposits available up to two days early.)

   These kinds of guardrails can help students build smart habits while giving parents peace of mind.

2. Check access and availability of branches and ATMs

   While digital banking is convenient, don’t overlook the value of physical access. Make sure the bank has ATMs and branches near campus. There may be times when they need in-person help to resolve an issue or ask questions, like they would with professors’ office hours. Show them how to make an appointment to meet with a banker, and explain why walking into a branch can still be a smart move.

3. Introduce savings opportunities

   If your student doesn’t already have both a checking and savings account, this could be a good time to start. While a checking account supports everyday spending, a savings account encourages discipline and goal-setting. Wells Fargo customers, including Clear Access Banking users, can use LifeSync in the Wells Fargo Mobile® app to set and track financial goals, setting the stage for good financial habits later.

4. Confirm the ability to send, receive, and request money

   Finally, consider how your student will send and receive money. The fastest way to send money to your kids in college would be to transfer between your accounts. Look for accounts that support payment tools like Zelle®,¹ which also allows quick transfers between friends and family. This is especially helpful when your child needs funds fast or wants to split expenses with roommates. Teach your student to hold others accountable, especially if they’re lending money to friends or family. They can use Zelle® to request repayment and avoid being last on the list to get paid back. “You might want to get used to seeing your child send you Zelle® requests,” said Millar.

Figuring out how much money, if any, to send your college student can feel like a guessing game. But with a few thoughtful questions, you can land on an approach that works for both of you.

Start by considering your student’s financial situation: Will they be working during the school year? Are they relying on money earned over summer or holiday breaks? Are they living on campus with a meal plan or off campus where they’ll be buying groceries and cooking for themselves? Next, think about the cost of living in their college town. Is it a high-cost area where even basics like transportation and food are more expensive?

Clarify what you’re willing to cover: just essentials like books and groceries, or also extras like takeout, rideshares, concerts, or ski trips? Having this conversation early helps set expectations and avoid surprises.

If you do decide to provide financial support, consider how and when you’ll send it. Will you transfer funds at the start of the semester, on a monthly schedule, or only as needed? Talk about how they plan to manage their money.

First-time money managers are bound to hit a few bumps in the road, so it’s a good thing they’ve got a parent like you to look out for them. To help them build smart money habits and prepare to steer clear of these financial missteps, Millar suggest looking out for these potential pitfalls:

Mistake #1: Overspending

It’s easy for college freshmen to overspend. They may not fully understand how much they have day-to-day or how quickly it can disappear. Encourage your student to regularly check their accounts in the app. This simple habit can help them stay on top of their money and avoid overdrawing their account or being short when the rent is due. For those who are apt to forget, set up alerts to track balances and spending in real time.

Mistake #2: Failure to plan

Many students get tripped up by unexpected expenses like lab fees, transportation, or social events. Instead of diving into a full budget, help your student create a basic spending plan that adds a cushion for emergencies. Talk through everyday costs and brainstorm what to do in case of a surprise. Planning ahead builds confidence and gives them tools to problem-solve before money trouble hits.

Mistake #3: Responding to scams

Back-to-school season is also prime time for scammers, and students are especially vulnerable. They’re online shopping, applying for jobs, and searching for housing — all common channels that scammers exploit. Top scams targeting college kids right now include:

• Textbook scams: You buy a book that never arrives.
• Fake job postings: That job sounded too good to be true because it was.
• Rental fraud: False listings for apartments or rooms that don’t exist.
• Scholarship scams: “Guaranteed” scholarships that require upfront or application fees or personal information.

“My biggest tip for parents and students: Anyone pressuring you to act immediately, such as by sending money or sharing personal details, is a red flag,” said Millar.

Encourage your student — and those around you — to be cautious of unsolicited texts, emails, social media messages, and phone calls, particularly those that ask for personal information or payment upfront. Help them recognize the signs of a scam and remind them to pause, verify, and ask questions before responding. A little skepticism can go a long way in protecting their finances and personal information.

When your child heads off to college or starts living away from home, it can be tricky to strike the right balance between giving them financial freedom and helping them avoid costly mistakes. You want to support their independence while keeping a watchful eye on their accounts.

Start by encouraging your student to regularly check their account balances and transactions. Like every few days. Set up alerts so both of you can monitor spending and spot anything unusual. If you have joint account access or authorization, you can help them track their finances and identify suspicious activity.  

Most importantly, instill confidence in your child. Let them know you trust they’re ready for this responsibility — and that you’re always there when they have questions or need guidance. It’s not about control; it’s about support, accountability, and learning together.

First, make sure they understand the difference between debit spending and credit card spending. You can explain it like this:

• Think of a debit card like using the cash you already have, because the money comes directly out of your checking account. If there’s not enough in your account, the transaction might be declined, so it’s important to keep track of your balance by checking your app and getting alerts.
• A credit card lets you borrow money from the bank to make purchases, with the expectation that you’ll pay it back later. If you don’t pay the full amount each month, you’ll be charged interest, which can get expensive fast. Credit cards can help you build a credit history, which will be important for renting an apartment or getting a lower rate on a car loan. But they also come with responsibility. Spending more than you can afford to repay can lead to debt and hurt your credit score. Think of it as a tool — not free money — and use it wisely.

Every family is different, but both a debit card and a credit card can be useful tools for college students, as long as expectations are clear. A good rule of thumb is to use a debit card for everyday purchases like food, supplies, or transportation, and reserve the credit card for emergencies or larger, unexpected expenses.

Setting these guidelines early can help your student build confidence and make thoughtful choices as they learn to manage their own money.

Read more

• How to add an authorized user to your credit card
• How to choose the best credit card for you