So you just moved your 18 year old into their first dorm room, unpacked the car, helped make the bed, and now you are wondering what comes next. Here are 3 things you can do to help your college student better manage money for life:
- Give them money for each month, not the entire semester or entire year. Be careful not to give them too much money to spend each month. Think about what they will be able to earn once they get out of college. Once they graduate, they may only be able to get a job paying $25,000 per year. With withholding taxes and other deductions, they will only have about $1400 a month to spend. That money will have to cover rent, food, utilities, clothes, transportation, and all the other expenses. Set them up for success by letting them learn how to live within their means.
- After the first month, go over how your student has spent their money. Discuss the incidental expenses not covered by the room and board that you may be paying. This would include transportation expenses, weekend meals, entertainment, clothes, personal care and grooming, and laundry. If you find that your student spent money carelessly, then discuss it openly without getting angry. If y
- Ask them to refuse to apply for any credit cards. There will be plenty of time for them to do so later when they have a job and an income. Explain to them that they should only use and have credit cards when they have the money available to pay the amount due in full.