Teach budgeting to your college-age child
These four tips can help your college-age child create a realistic budget and stick to it.
1. Make a list of monthly expenses
Ask your college student to make a detailed list of his or her monthly expenses. Upfront expenses will be greater because of needing electronic equipment, items for the dorm room, textbooks, and more.
Have your son or daughter budget for regular monthly expenses, which may include food, entertainment, personal items, miscellaneous items, and emergencies. Allow him or her to negotiate for the money needed each month—but you set the limit.
2. Come up with saving and earning ideas
Hopefully your child will suggest both money-saving ideas and ways he or she can earn money. Kids who don’t work or can work only a few hours a week during school have lengthy vacations during which to earn money.
Your child may want to try these ways to save:
- Buy used textbooks and sell them at the end of the semester
- Limit going out to eat with friends
- Make group meals with friends to reduce costs
- Walk, use a bike, or take public transportation
- Look into getting scholarships or becoming a resident advisor to get free room and board
3. Set up a checking account and a debit card
It’s important that your student have the independence to budget and spend, but don’t put all of the money for the whole semester into the account at one time. If you do, your child may run out of money too soon. You may not want to agree to a credit card at this time. It can derail budgeting, and your child may pick up bad financial habits.
4. Review together at the end of each month
Go over the budget with your child every month. See where he or she has trouble sticking to it and where it’s easy. You may need to adjust the budget if items end up costing more or less than the original estimate.
Remember, this first budget experience will be the foundation for a lifetime of financial freedom.