Planning For Your Children's College
Whether you have children entering college for the first time or have been down this path before, helping young adult children manage the financial responsibilities that come with independence can be a challenge—especially when it comes to monthly cash flow. The following tips can assist college students, as well as parents helping to foot the bill, keep a cap on spending.
Create a Budget
Work with your child to develop a realistic budget, taking costs such as text books, school supplies, clothing, food outside of a pre-paid meal plan, entertainment, personal care items, and laundry into account. Separate “wants” from “necessities” in prioritizing monthly spending. Determine how much your child will be responsible for contributing each month from prior savings or part-time work, and how much you will contribute.
Incentives can be very effective in motivating engagement and rewarding positive behaviors. Consider offering a small incentive when your child stays within the budget you had agreed on in a given month—a few extra bucks for pizza or a movie is enough to do the trick and will set you back far less than a single overdraft fee. The corporate world has long used incentives to promote and reward sound budgetary management and fiscal responsibility. Think of it as getting them ready for the real world.
Consider Pre-Paid Credit or Debit Cards
One of the best ways to avoid “surprise” credit card balances or bank overdraft fees is to provide college bound students with a pre-paid debit or credit card. Pre-paid cards enable you or your student to add money to the card at any time, while helping to prevent unbudgeted expenses or unauthorized spending sprees.
Don’t hesitate to contact one of our Investment Representatives at your convenience if you’d like to discuss ways you can help prepare for the costs of attending college.
This information is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.
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