From textbooks and T-shirts to pizza and parking, every day of college life is filled with expenses. So how should your son or daughter cover these costs?
For some students, getting a job and earning their own spending money is the only way they can make ends meet. But if you’re willing and able to help your college-aged kids, a monthly allowance can often be the best way to go.
It’s an Allowance, Not a Donation
Monthly allowances mean giving your kids a set amount of money each month to help cover expenses can keep them focused on school rather than trying to make ends meet. Instead of simply refilling a student checking account whenever your child is “running low,” an allowance can help put your student on a strong financial path by teaching how to budget for monthly income and expenses.
Before setting foot on campus, sit down with your child and plan out a realistic amount of money to spend each month. In addition to ongoing expenses, help them consider seasonal or unpredictable costs. A few good questions to ask are:
- How will tuition and fees be covered each semester?
- Which costs are already covered by school fees? (Dining plans, gym memberships, etc.)
- How much are textbooks and other school supplies expected to cost at the beginning of each term?
- How much should be budgeted for groceries and dining out?
- What about rent or utilities for students living off campus?
- What’s a reasonable amount to set aside each month for entertainment and going out?
- Are gas and other transportation costs going to be an issue?
- How will emergencies be covered? And what constitutes an emergency?
Use this calculator to better determine the true cost of college.
Tamsen Butler, Author of The Complete Guide to Personal Finance for Teenagers, says as it’s fine to support your children while in school. Along with that financial support, though, should come some clear guidance on the difference between needs and wants, along with the keys to maintaining an accurate budget.
Open Communication Is Key
Encourage open conversations about spending and savings, especially if your child gets into financial trouble. “It shouldn’t be a taboo subject,” Butler advises.
If your college student begins building up too much credit card debt or starts living beyond their income, work with them to determine whether the problem is an allowance that’s unrealistically low or spending habits that are wasteful.
Offering an allowance doesn’t necessarily mean paying for your student’s every need and want. In fact, they should be reminded that the goal of an allowance is to learn to live within their means.
Students can learn more about financial planning in college by reading these money tips college grads wish they’d known.
