Once you get through paying for tuition, text books, room and board, supplies and activity fees, there is one more expense you have to count in–the monthly spending money that your college kids will need.
Most college websites are very helpful with suggestions of how much money your student will need, with suggestions averaging $200-$300 a month, minimum, to cover expenses from laundry to shampoo to late night pizza runs.
While these suggestions are helpful, the real amount is going to depend on your student, where he or she goes to school and what kind of lifestyle he or she expects. The classic college student ramen noodle budget may be no more, as many students what to make sure they have private sports lessons and access to Netflix.
The first thing you have to do is to sit down with your student and have a talk about which expenses you will cover and which you will not. There is probably a lot of disparity there, and some negotiation may need to be done. Are you paying for the season ski pass, the insurance on his or her car, meals away from campus? Map out what things you are willing to automatically cover and what you are not.
Next, establish a budget that your student must use. You can make it pretty simple, with categories such as food, toiletries, clothing, laundry, gas and entertainment. Next, take the dollar amount that your student will have available each month and divide it into the categories. Where that money comes from is up to you. It might be fully funded by the parent, fully funded by the student or a combination.
Having a budget forces your student to make some tough choices and to really pay attention to the spending. It won’t be long before he or she understands exactly how much things cost, from a poster for the wall to that bottle of salon shampoo. It also keeps students accountable for what they spend. When the money is gone, it is gone.
Many parents decide to give their students access to a gas card, and allow them to use it without limit. This can be a bad idea for two reasons. The first is that it doesn’t teach the student about budgeting or conservation. The second is that kids can also use the gas card to purchase other things at the gas station. Some entrepreneurial kids will even fill up their friends tanks and ask for a potion of the cost back in cash. A better bet is a budgeted account in which a set amount of money is deposited each month.
Make sure to check in with your student about his or her account and budget, especially after the first two weeks of school. Unexpected expenses can come up, and the budget may need to be reworked to accommodate this.