Crash Financial Course for College Frosh
There's still time to help your child learn to manage money before he or she heads to campus this fall.
Could you do a column of advice for financially clueless college freshmen like my daughter? The other day I heard her tell a friend that when she uses her bank card to buy something, "I shut my eyes and hope I have enough money."
She's already spent her summer earnings, which she was supposed to use for spending money at school, on $100 jeans and going out every night with her friends. Her father manages her account (often overdrawn) because it's easier to do it himself. But I shudder to think what's going to happen when she goes away to school.
What's going to happen is that college could cost a lot more than you bargained for. You don't have to track every penny, but your daughter needs a dose of tough love to make her more accountable and show her how to live on a limited income. Not only will you save thousands of dollars, but she'll get a priceless lesson in managing money.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Before she leaves home, have your daughter spend a week recording all her expenses with her friends. If she spends, say, $20 a night, convert that into terms she can understand -- $100 a week on food and movies equals 12-plus hours on the job or a new pair of jeans.
Ask Dad to back off and have your daughter manage her own account. That means making deposits, saving receipts, balancing the account (either online or on paper) and learning how to write an old-fashioned check. Hint: Buy a notebook and matching Post-its to jot down expenses, plus a colorful container in which to toss receipts. Little reminders make a big difference.
Before your shop for back-to-school gear (as your daughter will certainly expect), take an inventory of the stuff she already has. It's a hands-on lesson in distinguishing between things she really needs and those she merely wants.
Shop together, and set a reasonable limit on how much you're willing to spend. If that happens to be, say, $400, your daughter will have to decide if she wants to use up one-fourth of her allotment on a single item of clothing.
Let her know up front which college expenses you'll pay for -- books, for example -- and which are her responsibility, such as food outside the meal plan.
Because she's spent her summer income, you'll probably have to provide an allowance. Dole it out one month at a time, lest she blow through a semester's worth of cash before October. When she calls in mid September to say she's out of money -- and this is critical -- make her wait a couple of weeks. Bail her out once and you're sunk.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
Should You Renew Your CD?With rate cuts impacting earnings, we examine if now is a wise time to renew CDs.
-
7 Ways to Plan Now to Save on Medicare IRMAA Surcharges LaterUnderstand the critical two-year lookback period and why aggressive planning before you enroll in Medicare is the most effective way to minimize IRMAA.
-
Smart Strategies for Paying Your Child an AllowanceBy giving your kids money to spend and save, you’ll help them sharpen their financial skills at an early age.
-
I Need to Cut $1,000 From My Monthly Budget, and I've Already Given Up Starbucks and Dining Out. What Else Can I Do?Here are some creative ways to save up to $1,000 a month, even if you feel like you've already made all of the obvious cuts.
-
I'm a Government Employee and Need to Get By Until the Shutdown Ends. What Can I Do?The second-longest shutdown in history is leaving many federal workers with bills due and no paycheck to cover them. Here's what you can do to get by.
-
What Does Medicare Not Cover? Eight Things You Should KnowMedicare Part A and Part B leave gaps in your healthcare coverage. But Medicare Advantage has problems, too.
-
The 50-30-20 Budget Rule: A Simple Way to Save MoneySaving Using the 50-30-20 budget rule is an easy way to save. It helps you prioritize saving while paying off debt.
-
'Food Tax': Which States Still Tax Groceries in 2025?State Tax Ten states still tax groceries, but that figure is shrinking.
-
How Our Family Fights InflationBudgeting Millennials typically spend more than other generations on certain expenses that have been increasing most rapidly. Here are some tips to cut your losses.
-
Gas Prices Around the WorldBudgeting Many world gas prices can make what Americans pay at the pump seem like a bargain. But not all.
