By FOXBusiness

Filed under: Planning

By EMILY DRISCOLL

Incoming college freshmen might be stocked up on school supplies, dorm furnishings and the latest tech gadgets, but they also need to be equipped with the right financial guidance before heading off to school.

According to a recent survey of 40,000 first year college students conducted by education technology company EverFi, students are already showing risky monetary behaviors as freshmen.

Of the population of students who had a credit card, 23.7% have more than $1,000 in credit card debt, 35% report typically only making minimum payments and 7.5% admit paying a bill late at least once in the past year.

Discussing financial responsibilities and negative consequences of poor financial habits can help prevent students becoming buried in debt and establish budget skills that will continue into adulthood.

“By the time they’re out and on their own, if they don’t have these skills down, they’re really behind the curve and at a disadvantage,” says Robert Stammers, director of Investor Education at CFA Institute. “It’s so important for parents to take the time to use [college] to really start enforcing these types of financial management rules and use it as a learning experience.”

To avoid panic mid-semester, here’s the four financial topics experts say families should discuss before students leave for campus.

Topic No. 1: Determine Financial Obligations

Creating a budget and determining which party is responsible for what costs can help stave off overspending and late payments.

If parents are financially supporting their child, making a “needs vs. want” list can help students better understand how to live within their means, says Steven Smith CEO of Finicity, maker of money management program Mvelopes.

“Approved purchases could include food, necessary transportation expenses, and a specific amount for clothing,” he says. Be sure to set limits on what is considered appropriate spending for each category.

If students plan to work while in school, it’s important to discuss expectations for how much the student will be working as well as how much they will contribute towards college costs, says Scott Halliwell, certified financial planner at USAA.

“It’s great for [students] in terms of managing their finances so they get the understanding of, ‘I made this money myself and it’s not just my parents giving it to me’ — it really helps with some real life balancing skills,” he says.

Topic No. 2: Discuss Expectations About Credit Card Use

Responsible credit card use is one of the biggest issues for college students, according to experts.

With the CARD Act of 2009 in place, students will likely have to have a parent co-sign on their credit card account, or become an authorized user of their parent’s card.

Halliwell cautions parents about putting their credit score at risk by co-signing for their child without establishing when it’s acceptable to swipe for a purchase.