College Student Budgeting

February 22, 2010

The college years are a time of learning, and a time for young adults to get a sampling of what it’s like to be out on their own. They are also a very expensive time for parents. By the time they pay for their children’s education, there’s often little left over to help with their living expenses.

Perhaps it’s best for college students to fend for themselves, to some degree anyway. When they’re done with their schooling, they will be out in the real world, so it’s good for them to start learning how to manage money. The college years are a prime opportunity for them to learn how to budget and live within their means before it becomes mandatory for them to do so.

As parents, we are in a position to help our children learn to manage money wisely. But many times it’s just too easy to throw them a lifeline if they have trouble. Here is some banking advice for teaching university students financial responsibility.

  • Strongly encourage your child to do work study or get some other part-time job. While it’s important that college students have time to concentrate on their studies, it’s also important that they learn to support themselves to some extent. Even if they just work for a few hours on the weekends, it will foster good habits and help them earn some money.
  • Help them find ways to save money. Encourage them to get a meal plan (and use it) instead of eating out. Find sources for inexpensive used textbooks. Point out sources for discounted clothes and other necessities. This will help them get what they need for less and show them the benefits of being frugal.
  • Carefully consider whether or not to help them get a credit card. Credit cards can be very handy in emergencies, but they can also present temptation to overspend. If you feel that your child is responsible enough to use a credit card wisely, you could get a card in his name on your account or co-sign for him to get one of his own. But it’s a good idea to make sure it has a low spending limit, and to encourage your child to pay it off each month.
  • Consider a prepaid card as an alternative to a regular credit card. Parents can get prepaid credit cards for their college students and reload them with their own money. If you want to help your child with expenses, you could add a certain amount to it each month or each week. And if there is an emergency, you’ll have a way to get money to your child quickly and easily.
  • Young adults who learn to live within their means during the college years are better equipped to make it on their own after they graduate. As parents, it’s our job to help them become more independent while helping them develop the right attitude toward spending. These tips can help achieve that.

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