This is from my segment on Atlanta & Company on May 18, 2009.
It’s one of the proudest moments in any parent’s life—dropping off your child at college. Ah, what a sense of accomplishment. But get ready to drop off your bank account at college too. Going to college can be expensive and we’re not even talking about the cost of tuition.
Most parents think all the costs of college are listed in the college acceptance package, but that is just the beginning. You need to factor in many other costs too.
Give them a salary
You’re sending your kids to college on their way to the real world, so introduce them to the real world early. Give them responsibility for their finances when they head off to college. The best way for them and you is to give them a salary. Give them a fixed biweekly salary and teach them how to budget. If you just offer to help pay for things and give them a credit card to charge other things, you are setting yourself up for disaster.
When you give them a salary they can learn to make it work and you have limited your expenses by giving a firm amount. To come up with the amount sit down with your student and figure out all the costs and who will be responsible for what. A good resource to start the conversation is 40 Money Management Tips Every College Student Should Know.
Part of the college experience is living on campus and enjoying dorm life and cafeteria food. This is also a great way for parents to control costs. While on paper living with roommates in an off campus apartment seems cheaper, it almost always ends costing way more. Not only are there numerous more monthly bills to pay like rent, utility bills and grocery bills but none of these costs are fixed costs so every month costs can change. For example what happens when a roommate decides to move out, suddenly the rent has dramatically increased. And let’s not even talk about the cost of furnishing an apartment even with used items.
So if your child desperately wants to live off campus, pay their salary based on on-campus housing and dining costs. They should be responsible for coming up with the difference by getting a part-time job. And if their grades would suffer with a part-time job then living off campus would also harm their grades.
Will your child take a car with them to college? If so, get ready to pay. And the more urban the college location is, the higher the costs and the more reason NOT to take a car. Parking permits at colleges can cost hundreds of dollars a year and gas and insurance costs more in urban locations too. So why pay all that when you can take advantage of both public transportation as well as free college shuttles that transport students around local shopping and dining areas. And if there is an occasional need for a car the majority of colleges now have Zipcars you can rent by the hour.
Send all bills home
The mailing address for all bills should be the parent’s address no matter who is paying the bill. You want to monitor the bills to make sure they are getting paid. The student can sign up for online access to view and pay the bill online. Otherwise students end up having bills lost or forgotten in their college post office box, address from last year or who knows where.
Don’t forget about fun
Make sure their salary includes some fun money too. College students will eat out and go to parties and the best way to keep it under control is to give them a firm monthly budget for that. Let them that amount is firm and they should learn to plan and save funds for months when their entertainment expenses might be higher such as homecoming or spring break.