With every new phase of education comes a new phase of financial responsibility and expectations, and teaching the value to students at every stage of their educational journey is important so that they have the tools in place to feel financially confident as they gain more independence. Advising students of their options while empowering them to make their own conclusions and choices is the best way to offer wisdom but leave them in the driver’s seat. Recognize the individual nature of each situation and try to stay unbiased.
Keep the educational goal as the center of your examples and let the student connect the dots to complete the path towards achieving it, whether they aspire to open their own personal injury law firm, become a doctor, or pursue any other career. The best advisors are also the ones who stay committed from beginning to end. Being able to provide resources and next steps for a student’s plan will get them to believe in the lessons you are teaching and execute their own follow through if they know that they will be supported for the duration of their journey.
Evaluate their Accounts
Specifically, when advising students entering the higher phases of their education, earning an MBA for example, go over their current accounts with them to discuss if this is the right place to get money for this phase. The earlier someone learns to live within their means, the better off they will be. Even the wealthiest people in the world have a budget, and although financial indulgences are not uncommon, it needs to be understood that they are the exception and not the rule.
If their current accounts do not seem to support their lifestyle needs as well as their educational goals, move onto informing them about taking out student loans with a private lender to pay for their MBA. This candidate might have a better financial footing than an undergrad looking for a loan, so highlight the perks specific to seeking out a loan at this stage of life. Facts like elevated credit scores, good repayment history on existing debts, and the possibility of not needing a cosigner will help them to feel comfortable and like this option isn’t being presented to them as a one size fits all solution.
Help them Think Long Term
Break the long-term vision up into steps but keep circling back to that end goal. Showing the student that achieving the goal is manageable with a realistic time frame to achieve it will increase their accountability and overall success. Ask them questions about their life outside of education and include that in the plan, setting benchmarks that are unrealistic will discourage the student and always make success feel unattainable. This suggestion applies to not only the plan for earning the degree but paying for it as well.
If it has been determined that they are taking out a student loan with a private lender to earn their MBA show them that although the total loan amount can be significant, broken down into payments it can fit into their existing budget with just a little finesse in other areas. Having a frank conversation regarding how today’s financial choices affect tomorrow’s opportunities is not a scare tactic. Rather a well thought out approach to outline risk in a levelheaded way. Students need to understand what being reckless with their finances may cost them in the future. Minimizing the fear of failure and level of risk sets up a good mental foundation to have the focus remain on the task at hand.