A Budget for Your College Student
Many students will first handle money without parental supervision during college. To help keep expenses down and avoid conflicts, you might want to develop a budget to guide your child’s spending. As you go through the process, consider the following:
- First consider all potential expenses, including food, travel, clothing, entertainment, phone, periodicals, computer expenses, medical and dental expense, and insurance.
- Develop a preliminary budget for the first couple of months of college. You may find that you forget about certain items. After your child has lived on his/her own for a couple of months, you can develop a more realistic budget.
- If your child has trouble sticking with the budget or can’t account for large sums, have him/her keep a journal for a couple of weeks that details all expenditures. Go over the journal together to determine how expenses can be reduced.
- Consider providing you child with a debit card rather than a credit card. Since your child’s spending will be limited to the amount on deposit, it is harder to overspend.
- Explain the basics of credit cards. Make sure your child doesn’t use a credit card as a means to overspend. Go over which types of items your child can use the credit card for and which items should not be charged. Make sure your child understands that if the balance isn’t paid in full each month, a significant amount of interest will be paid on the outstanding balance.
- Have your child provide you with a written comparison of his/her actual expenses to budgeted amounts.
While the entire process might seem like a lot of work, keep in mind that you are teaching your child money basics that will help him/her for a lifetime.
Copyright © Integrated Concepts 2013. Some articles in this newsletter were prepared by Integrated Concepts, a separate, nonaffiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed, but should not be regarded as a complete analysis of these subjects. The appropriate professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.