It’s just after Labor Day weekend. Fall is in the air, stores are already selling Halloween candy and your college student may have just left for college a few days or weeks ago. Do you think your college student knows how to manage his/her money at school?
Whether your child is an aspiring poet, physicist or econ major, your child needs to be able to manage his own money while in college or you will be the perennial ATM machine in his life.
Here are the 5 things I tell all my clients’ children when they go off to college:
- Know EXACTLY how much spending money you have for the month or semester (depending if your spending money is allotted for the month or semester)
- Choose how often you want to get your spending money: each week like an allowance, each month like a salaried person or maybe you can handle it for the whole semester (risky)
- Have a checking and savings account at a convenient bank where you go to college:
- put all your spending money for the semester or month in the savings account.
- Have the bank AUTOMATICALLY transfer a certain amount per week or month to your checking/debit account and that’s your spending money.
- When you’re at $0, you’re done for the period until you get the next transfer.
- If you do not spend it all, it rolls over the next week/month.
- If you have to pay for it, put that in your savings, too, and do not touch it until you need to buy those items, then transfer the exact amount and write the check (or whatever way you pay for it)
The last item is not trivial. If your child thinks she needs to pay to get home and ran out of money, she may try to find a way home that puts her safety at risk. Put that money aside early and do not touch it. Make sure your child knows his safety is more important than anything financial.
Lastly, and maybe most importantly: AGREE with your kids what is discretionary and what is not. Yes, this may require a slightly uncomfortable discussion, because you think her guitar is discretionary and she thinks her guitar helps with her homework. Get it out in the open and agree to prevent arguments later.