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Financial considerations for the college-bound
as seen in The Racine Journal Times | August 3, 2017
If you’re like most families with young adults preparing to launch their college years, you’ve already invested time in selecting the right school, visiting campuses, registering, and picking out housing. By now the final pre-departure festivities have begun and soon it will be time to load up the family vehicle with goodies to decorate otherwise dull college dorm rooms.
Here are a few ideas to help enhance their financial well-being (and your peace-of-mind) while they’re away at school.
You may want to consider establishing an easy to use method for sending emergency money or paying for recurring bills. On-line banking offers a quick and easy way to transfer funds from your account to your child’s account. You may also want to check out mobile apps like PayPal or Venmo for other ways to help shoulder the financial burden, particularly in emergencies.
It’s best to establish in advance what you will become (or continue to be) responsible for funding versus what expenses will be paid by your child (funded by on- or off-campus employment). For instance, you may pay for off-campus rent and your child will be responsible for paying for food and supplies. You may want to help them set up a budget, clearly identifying anticipated and known monthly expenses. For some, this may be the first exposure to any kind of budgeting process and it can be quite a learning experience to see a spreadsheet that includes all the financial responsibilities that come with living independently for the first time.
Credit card offers abound on college campuses so help your young adult avoid getting in over their heads with deferred debt. They’ll have plenty of that already accumulating from college loans; they (and you) don’t need to also be straddled with high interest credit card debt. If they have a credit card, be sure the balance is paid in full each month whenever possible. Dinners out and visits to the campus bookstore add up quickly and it’s easy to lose track of credit card spending. Establishing some guidelines for what types of expenses should be paid with a credit card is advisable.
Remind them what documentation they should bring with them. Copies of their birth certificate, passport, health insurance and Social Security cards are a few. If they haven’t already done so, they should memorize their Social Security number as they’ll be using that a lot on campus. You may want to invest in a small safe or lock box where they can keep documents, cash and other items of value.
Being away from home for the first time is an exciting period in every young person’s life. It’s a time of exploration and discovery. It’s also a great time to exercise good habits around personal finance.
Justin Moilanen has completed the rigorous credentialing standards to earn his CERTIFIED FINANCIAL PLANNER™ designation from the CFP Board.Continue reading