While keeping track of finances may not be of concern to some students, it is a valuable skill to learn for all. Students should take the time to sit with their family and discuss budgeting before arriving on campus for freshman year. Many unexpected expenses could arise and it is important for students and their families to establish a plan for how decisions about these expenses will be made and how they may be paid for.
After the first major decision of how the direct expenses (expenses paid directly to the school) of tuition and fees and room and board will be paid for, families have to take into consideration the indirect expenses which will most likely be incurred. These usually include transportation, books and supplies, and personal expenses such as health insurance. Creating a list of these expenses and calculating what is expected to be needed monthly will help families understand what funds are necessary before the bills come in. A plan should be in place for paying for these expenses before the student sets off for college.
In addition to the expected expenses, it is a good idea to budget for the unexpected such as additional trips or activities the student may want to do and other discretionary spending for the student. Where will these funds come from? Make a plan!
Many students already have their own checking account from saving and working while in high school, but if they do not, it is time to set one up together. Many banks offer a free checking account, but it is worth considering banks local to the college first in case an issue arises. Parents can easily send money to the account as needed and get access to the account summary (if student agrees of course).
There are some very helpful programs to assist with keeping track of budget and spending and it is great practice for life in the 'real world'. Mint is a free program which allows you to set a budget for different categories, keep track of all expenses and bills, and make sure you make your payments on time. At any time you can log in to see where you stand for the month and get a good look at how well you are staying on budget. They also have a mobile app which is perfect for today's students who never go anywhere without their phone.
Should students get a credit card? College is a great time for students to get their first credit card not only to have in case of emergency, but also to begin building their own credit history. They can also begin to acquire points for spending. As long as the student understands what the card should be used for, payments are made on time and you choose one with no fees, it is a great thing to have. Take a look at NerdWallet's May list of Best College Student Credit Cards to get an idea of the associated details to consider.
Keep in mind as you are budgeting for future years that you need to fill out the FAFSA each year to continue to receive financial aid and you can continuously apply for outside scholarships throughout the student's college years. If you have any major changes in your financial situation which would increase your need, be sure to communicate that with the financial aid office as soon as possible.
Make a plan, talk about it, and continue to communicate the importance of budgeting and discussing expenses after the student is on campus. It is a lifelong skill we all need and an important part of your student's journey to adulthood.