Living on a college budget can be difficult for many students. Food, textbooks, entertainment, rent, and utility costs quickly add up. So, students must find ways to balance their needs and wants. Parents can help ease the transition from allowances and high school jobs to “real world” expenses by offering guidance and setting boundaries.
NEEDS VS. WANTS
Discuss with your college student their needs and wants. Paying bills and buying groceries are needs, for example. Nights out with friends are a want. Make sure your child understands that splurging in one area means skimping in another. Buying an expensive concert ticket might mean microwave meals for awhile. Help your student prioritize their expenses and allocate their money appropriately.
LIVING WITHIN THEIR MEANS
Especially if your college student has a credit card, explain the importance of living at or below your means. It’s better to be frugal than rack up debt on things you don’t need. Help your student understand the importance of knowing how much money they have and avoiding spending above that amount.
It’s a good idea to have a cushion in case of emergencies. You can teach your college student how to set a little money aside when they have the means to do so. This way, when car problems, textbook rental fees, or other unanticipated costs arise, they will be more financially prepared.
DETERMINE RESPONSIBILITY AND ESTABLISH BOUNDARIES
When your student leaves for college, you don’t have to completely cut them off financially. However, discussing what your child is responsible for, and areas you are willing to help, is key for challenging them to grow in their independence. For example, you might agree to pay for expenses traveling home, but your student is expected to cover rent and utilities. Express that you are available to discuss financial difficulties should they arise. Then, your student knows they can come to you if they find themselves in trouble.
Help your student establish good banking habits by teaching them how to track their spending. For example, teach the importance of regularly checking their bank account. Text alerts and eStatements are an easy to stay on top of their banking. Show them how to create expense logs with receipts. You could even encourage them to explore expense-tracking apps that categorize spending so they can observe exactly where their money is going.
College is a time for academic learning, but it’s also a pivotal period for financial growth and establishing strong money management habits. Don’t be afraid to talk to your college student about money. With your guidance, they can be on track for successful and effective budgeting.