Now that the school busses are back on the streets for another school year, our thoughts turn to "back to school" issues, like new clothes, supplies, and extra-curricular activities. One "back to school" topic that's often overlooked is college expenses. Sure, people talk about saving for college and filling out financial aid forms, but if you have a child in college, how do you help them keep their financial picture together? For most students, this is their first time living away from home and there are plenty of opportunities for them to learn some expensive financial lessons.
Here are some ideas:
1) Decide on a debit or credit card. Credit cards aren't for everyone, and debit cards allow the holder access to all the contents of their checking account. If you decide to co-sign for a credit card, be firm with the issuer on keeping a small limit and sending a copy of the statement to your house. For debit cards, use two bank accounts, keeping very little money in the debit account. This will help your student learn to decide which expenses are important to day and which can wait.
2) Discuss which expenses you'll pay and which expenses are your child's responsibility. Create a list and clearly identify who is paying for what, and if any limitations apply.
3) Make a budget. Many online budget tools can help your college student learn budget basics. Review the budget items together. You should be able to plan many expenses after orientation because schools publish lists of many frequent costs.
Reining In College Living Expenses
- Debit or credit card?
- Who pays which expense?
- Budget, budget, budget
Sometimes it's difficult to talk budget when it seems there are so many important things going on in a college student's life. Planning a good budget isn't just about making it through the semester without running out of money. That's going to happen anyway. Budgeting is a skill that your kids will be able to use the rest of their lives.