As you drop your child off at college, budgeting might be the last thing on your mind — particularly as you’re wiping your eyes and saying goodbye. But before you drive off, make sure you’ve set your student up with more than sheets and towels. Kids also need your help when it comes to forming a solid foundation for money management.
You can help them make the grade by making sure they take the following steps.
Separate wants from needs
College kids will need to do their laundry, pick up personal care items and buy various essential school supplies, but do they really need that daily $6 coffee drink, weekly pedicures, shopping sprees at the mall or those off-the-meal-plan dinners? These are the kinds of costs that add up, and without proper planning they can easily wreak havoc on a budget.
Fund extras with a job
If your student wants to fund a social life beyond what you’re likely already helping to cover, she should work a part-time job. She could leverage her smarts by tutoring students who struggle with a subject she excels in. Or perhaps there are certain days of the week when she doesn’t have classes at all and is free to babysit.
There are all sorts of ways to make a little extra cash. And what student doesn’t like having that extra cash, especially when it’s earned without cramping their college lifestyle?
Use credit responsibly
Credit cards are accessible to those who are 21 years old. (If you’re under age 21, you either need a co-signer or sufficient independent income/assets.) They can be a great way for kids to move into the world of financial independence. After all, this financial product is an easy way to work with the credit system, because the debt is optional.
When used responsibly, a credit card can help achieve a higher credit score. If your student is new to the credit world, he should get a card that’s both lucrative, with cash back on all purchases, and conducive to responsible money management (for example, offering perks such as cash back bonuses when he makes monthly payments on time, and free access to his credit score).
Look for deals
College students are eligible for all sorts of discounts at stores, local venues, restaurants, and services near college campuses. And in the process of looking for discounts, students learn the value of deal hunting.
What about saving on college textbooks? Unless it’s absolutely necessary, steer your student away from the campus bookstore, where prices tend to be the highest. Have him search for posts on campus bulletins, or shop at eBay and Amazon. Alternatively, there are rental options: kids should check out websites like Chegg, or ask the bookstore or school library about possible textbook rental programs.
Stay organized
Little expenses can chip away at the college student’s budget and easily become a big drain on her finances. Make sure she’s on the lookout for parking fines, late fees, overdraft charges and other costs she can avoid with a little extra attention to detail.
Save on rent
If your student is living off campus, he will likely enjoy the freedom and probably reap some benefits that dorms don’t offer. The challenge, though, is finding affordable housing. After all, rents are rising, and at a rapid rate.
Knowing your market helps. Search available rentals, and check Zillow’s Rent Zestimates as a starting point.
And since the college experience wouldn’t be complete without living with a bunch of people with different personalities, demeanors, and schedules, getting several roommates to share the rental costs (plus utilities, food and other extras) is the way to go.
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Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
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