College life is full of opportunities and experiences, and your child may be tempted to indulge in all of them. While it’s important to make the most of the college years, you don’t want your child going broke or buried in debt while doing it. Fortunately, there are a few budgeting strategies and tips you can teach your kids that will help them manage their money now and in the future.
Have The Money Talk
Keep the lines of communication open so your child knows how her education is being paid for. Whether it’s a 529 plan, scholarships or loans, make sure your student has transparency as to how much money they have and the approximate expense.
Anticipate Your Expenses
Make a list of the expenses your student can expect to have during his years in college. Tuition, room and board, and textbooks and not the only things to consider. There is also transportation, clothing, rent and utilities (if she is living off campus), and spending money for items including her cell phone, dining out with friends, travel, gym memberships or entertainment purchases.
Determine Fixed Versus Variable Expenses
Help your child understand that his fixed expenses are those he usually can’t avoid, such as room and board and tuition. Variable expenses are typically wants instead of needs, and can be reduced or eliminated if money is tight.
Establish An Average Monthly Cost For Each Expense
Take a look at your child’s past bills to help her figure out how much each expense costs every month. If a particular expense fluctuates from month to month, calculate the average and plug that into your student’s budget.
Track Your Spending
Encourage your child to set aside some time each month to record his spending and compare it to the money he has coming in.
Adjust As Needed
If your child is outspending his income, he will need to adjust those variable expenses to keep everything in line. That may mean reducing spending on fun activities, like dining out with friends, concert tickets, or other entertainment. It’s not pleasant to pass on those things, but it’s good self-discipline for later in life. If he complains, explain how he can work additional hours at his job or apply for additional scholarships to cover unnecessary expenses.
Use An App
Have your child research free budgeting or money-management apps. These tools are an easy way to track his spending.
Take Advantage Of Student Discounts
Many businesses will provide special pricing and deals for college students, such as discounts on computer software, shipping, food, clothes and more. Always ask a business if student discounts are available.
If you have questions about saving for college or helping your child budget, contact Donohoo Accounting Services. We are dedicated to helping our clients with their financial and tax issues, and would be happy to get your child on the right financial foot. Contact us today to schedule a free consultation! For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!