Budgeting tips for college students
If your son or daughter is heading off to college in the next few weeks, your “to do” list to get them there probably has dozens of items on it. And even though that list is long enough, I recommend adding a few more items to the list.
Often overlooked, these items are important to get your child financially ready for their big move to college.
Issues to consider as part of your college prep list:
Set a budget
Review likely expenses and how much they will have available to spend. Create a list of categories such as meals (be sure to note if they have a meal plan), supplies, school fees, etc., and allocate an amount to spend on each.
Remind your child to log expenses regularly and plan to review these periodically. There are many personal finance apps that can help.
Make banking arrangements
Clearly establish how your student will access spending money. If you’re contributing to their everyday funds, open a joint bank account so you both have access. Choose a bank with branches at home and on campus, or at least strong online access.
Review check-writing, depositing and withdrawing money, bill paying and keeping track of debit card expenditures. Teach them how to protect their accounts, check their statements, balance their checkbooks and keep copies of financial records before they go to school. Remind them about fees incurred for bouncing checks.
Emphasize prompt payments
Let your kids know how important it is that they pay their bills on time. After all, skipping payments can cause problems with their credit rating, in addition to late fees.
Consider their credit card options
Building good credit is a must; it will help the student qualify for all kinds of services and can even affect job opportunities. Unless they are 100 percent responsible, the student’s first credit card should be a card on the parent’s account with a lower spending limit.
Or try applying for one credit card in your child’s name with a low balance limit (say $300). If the card is issued, encourage that it be paid off regularly to help build a positive credit history. Remember: There is no need at this stage to have multiple credit cards.
Back up their financial information
Make photocopies of the contents of your child’s wallet and keep a copy with you at home. Write down the phone numbers or websites of who to contact if that card is lost or stolen so you have a quick way to get replacements, if needed.
Consider their health care
Make sure your student knows when to call the health center, where it is and how it works. Visit the college health center’s website with your student, so they understand this resource.
Look into health insurance early. Know what is covered by tuition and what may be out-of-pocket. If your child takes regular medications, help them set up regular habits for taking them and also keeping the medication safe and secure.
Finally, remind them to always carry an insurance card.
Prepare for emergencies
Add these important phone numbers to your child’s cell phone: campus police, residence assistant, the health center and trusted adults who live nearby.
Also, stock your student with a first aid kit. If your child has turned 18 (e.g. legally an adult), make sure they sign HIPPA authorization forms allowing you to speak with their doctors should there be a need.
Consult your attorney
Visit with your estate planning attorney to, at minimum, ensure that they have power of attorney documents and health care directives executed and on file with you before they leave for college, should you need to act on their behalf in an emergency.
These financial steps toward independence are especially significant right now.
If you need help getting organized around these issues, consult your financial planner.
Karin Grablin, CPA, is with SRQ Wealth, 2033 Main St., Suite 103, in Sarasota. She can be reached at 941-556-9004 or visit srqwealth.com.