Your college student is away from home and managing his or her own money for the first time. A study by The Ohio State University in 2015 found that 70 percent of college students are stressed out by their finances. Here are 6 tips on how to help them manage their money (and reduce stress at the same time):
Encourage them to open a bank account and to be responsible for it. Talk about how you check balances, monitor your spending, and use credit responsibly. After all, you’ve been doing this a while now.
Create a Budget
Budgets get a bad name. All they really are is a way to think ahead about how much you’re going to spend, then measuring how much you actually spent. Simply being more aware of what you actually spend is a great way to cut back on some of the more frivolous spending. Encourage your student to plan out regular expenses, then track against what was actually spent.
If your finances allow it, and you give your student some spending money, agree on the parameters at the start of the school year, specifically the amount and frequency, and stick it. If your student suddenly needs more money to keep up with well-healed buddies, don’t give in. You will teach your student a valuable lesson about living within their means and budgeting, as well as resisting the temptation of keeping up with the campus Joneses.
After tuition, room and board, textbooks are one of the most significant expenses. Encourage your student to shop around, search online, and consider renting their textbooks. Planning in advance is key – if class starts tomorrow, the only option left may be to go to the pricey campus bookstore.
Even if your student’s college allows cars on campus, encourage your student to think about the vehicular money pit of insurance, parking fees, not to mention gas and regular maintenance costs. Encourage them to use public transport (a great time for studying with headphones or meeting new people on the bus), ride shares on Facebook, and use airport shuttles. If they’re dead-set on having a car on campus, tell them all the cost is totally on them, which may make them reconsider.
Unless they are coming home, do not, I repeat, DO NOT, pay for a spring break trip with friends that is not part of the college program. If they really want to go to Cancun, it has to be on them. It’s a good lesson in prioritizing spending and distinguishing between needs and wants.
Managing their own money for the first time can be daunting. Give your student some gentle guidance, and some practical money-saving tips, and watch them flourish.
fygböx - The College Care Package, Elevated