From groceries to textbooks to dorm room appliances, the list of college expenses goes way beyond tuition. But between learning to navigate a sprawling campus and finalizing a class schedule, watching how much they spend is generally a low priority for college freshmen.
That’s where parents can still play a part with the steps below, and help their college-bound children prevent overspending and stay in control of their money.
Write out a Budget
Most college freshman have no idea what a budget looks like, so parents, put one in writing and pack it with the rest of their belongings. If you’re interested in putting something together that you kid can’t claim to ‘lose’ then setup a spreadsheet in Google Docs. You can use Excel in there, and both you and your kid can be in there together updating and sharing.
With this system, you can not only see what they’re spending their money on, but you can move things around with them on the phone so they can see why you’re segmenting their spending.
By having a document detailing how much money to allocate towards everything from books to pizza, your future grad will know when they’re close to overspending. Now, if only it was possible to make a budget for parties.
Get a Prepaid Credit Card
Instead of giving your freshman student spending money in cash, give them plastic in the form of a prepaid credit card. They work just like any other credit card, but the balance is simply how much money you put on it.
Cards like the REACH card make it possible to control how much your student spends. For example, by adding money onto the REACH card monthly your student will have to spend it wisely to make it last- and once they use it all they’ll need to update you. If you tie this in with your Google Docs (or physical) budget sheet, then they’ll be able to really know what it’s like to keep within the bounds of a “salary” when they graduate and get into the real world.
Open a Joint Bank Account
With a joint bank account, both parent and student can deposit and withdraw money. This arrangement makes it easy for you to institute a weekly or monthly allowance for your student. You will also be able to track when withdrawals are made and how much each one is for, as well as wire money in case of an emergency.
However, keep in mind there is the risk of your student overdrawing while trying to pack on that freshman 15, resulting in expensive bank fees.
Buy Cheap Textbooks
Buying textbooks is one the easiest ways to overspend in college since they can be very expensive. Before purchasing them, students should first attend class to see if the books listed in the syllabus will actually be used.
When you do buy them, opt for used editions; they may even have the most important stuff already highlighted. Also, steep discounts on textbooks can be found from online booksellers like Amazon. This way, your student isn’t overspending, but rather saving.
Some other sites to consider:
Furnish from Home
Dorm rooms are typically small and plain-looking to begin with, so there is no reason a college freshman should overspend trying to furnish one. Instead, your student can raid your home basement or garage for old appliances like a mini-refrigerator or microwave.
Many colleges will rent out similar appliances, but not at the cost of “free from home.”
Tracking your Spending
There are many sites out there (including certain banks that offer online banking options) that can automatically take where you’re spending and consolidate it into a report. This way, you can see if you’re spending too much money on clothes, food, drinking and what have you. Then you can adjust your budget accordingly and cut out extra spending where necessary.
If you’re looking setup and track your goals, there are many excellent resources out there that can guide and help you.
Conclusion
In all of the excitement of starting college, both students and parents can get carried away, but it can come at a cost.
By taking some of the steps discussed above, college freshman can avoid overspending and keep their savings high like their grades.
How did you or your college student prevent overspending?
