You have a lot to do as you get ready to send your child off to college. Make a few quick words about money matters a priority, since kids need the help as they start this next phase in their lives. You’ll ensure they are happier and more able to handle money in the long run.
Some kids go off to college with only the money they’ve saved up from working or gifts (that’s how my family handled it). My dad handed me two $20 bills in the fall and again after the holiday break, and that was how we handled spending cash in my family. Other families deposit a certain amount in the student’s bank account (or on-campus spending account) each month or so.
Be clear with your child about whether you’ll give them any spending money and when. There are endless opportunities at college to spend a buck or three, so having your kid know how much they can expect for spending money is important to how they manage their lives.
Make sure they know how many meals to expect on campus each week and when. Some meal plans don’t have weekends provided. Other times, they may want to visit the campus convenience store, and some of that spending can be funded for snacks/coffee/soda from the meal plan.
Kids don’t automatically know how to handle a meal plan, nor what to do if they don’t have certain meals provided (like on weekends). Talk with them about how to handle food prep in their dorm or apartment and some good strategies for nutritious food they can prepare on their own. This is a good thing to practice in the summer before freshman year!
Many schools now insist on entrance counseling for student loans, so that students know exactly what they’re committing to for the long haul. Have you had a conversation with your child yet about how much the whole cost of college is for four years, and what’s needed for student loan amounts?
I wouldn’t say this is a conversation you need to have when you drop them off at New Student weekend, but certainly something to cover in their first year of college. Knowing how much they’ll owe when they’re done, and what kind of payment that translates into each month, is an important part of planning out their adult lives.
Should your child have a credit card while on campus for emergency needs? That depends heavily on how experienced your child is with credit, and if they can resist the real temptations to spend on credit while at school. As you likely know from your own spending, it’s really easy to put a lot of orders on Amazon. The big difference between you and your college student is your income capacity to pay off that Amazon bill.
Talk with your child about what a true emergency money need is. Is it the books and supplies they need each semester? Nope. What about if they need gas money to get home for break? Ok, maybe. Have the conversation now, and you’ll save the bail out you may have to go through when they mess up in October.
The main theme with these conversations is communication—set expectations with your (now adult) child about handling money at college and you’ll save heartache later from panicky phone calls or big debt problems.
Need more help with college planning? Reach out for a free introductory call on how to do a comprehensive college financial plan.