I touched on this way back in July-financial independence is an important part of adulthood, and, as I wrote then, far too many students and adults find themselves with “too much month at the end of the money.”
Now is the perfect time to start your son or daughter on the path to financial independence. Whether you have children in high school or college, it’s never too late-or too early-to hand over a little responsibility.
I suggest making the process of handing over financial responsibility gradual. Give your student some notice before the new “money rules” go into effect, and have open discussions about how they can best meet the challenge. If you child appears worried, you want to coach him or her on budgeting ideas that will work.
How much of the financial reigns you hand over will probably depend on your child’s individual situation and maturity level, so it’s really up to you to make the call about what your child will pay for and what you will still cover. Below is a list of items you might consider having your student pay for (but I’d advise against handing off ALL the items on this list to your child at once!).
- Car payment
- Parking permit
- Sorority/Fraternity/Club/Sports fees
- Part of total school costs (you choose the percentage)
- Cell phone bill
- New clothes
But Mom and Dad, How Am I Supposed to Pay for This?
Learning to manage a budget is a wonderful skill to acquire, and while your student may resist it, it is a necessary skill for them to possess after graduation. So, how can your student develop a budget?
First, remember that working part-time during college isn’t a bad thing! It builds a student’s work experience and résumé (great for future jobs and scholarships), AND working 15 hours or less per week in school has been shown statistically to correlate with higher grades!
Second, help your student look for money elsewhere. Students can apply for private scholarships (free money for college that doesn’t have to be paid back!), and if necessary, take out federal student loans (but be sure they understand the consequences of borrowing money for college because these DO need to be paid back!).
Third, teach your student how to be frugal (but healthy!) Help your child figure out how to eat cheap but healthy meals, use coupons, discount shopping websites, various tips you use to save money, or send them over to our student blog for money saving tips like this great article, 50 Ways to Save Money in College.
All the best,