Getting Your College Child Ready For Responsible Spending
Money is never an easy thing to talk about but a discussion about money – earning, borrowing, and spending it - is an important conversation no parent and child should miss out on.
Before your child steps into the university, you should plan on spending at least one afternoon to go over budgeting and finance management with him. Taking into consideration that your kid would be independent from your guidance while he is away for college, it would be in both your best interests to have a serious talk about how he would be handling his finances. It would be an easy conversation only if you have lain out the rules of handling money early on but if not, well, prepare to receive blank stares which means you will probably need to have a longer and more detailed conversation.
The planning parent would have thought of introducing the value of money in his child from the moment the kid receives his first monetary allowance. However, if you had put off this task until recently, it is still not too late to make your kid money smart.
One of the things you would need to discuss is what part of your child’s spending you would cover. For instance, if he already has a scholarship or a loan for his tuition and a little bit left over, you can tell your child that you would only be covering his dorm fees, book expenses and monthly allowance. Your child should understand that money does not grow in trees and it would help the family finances if he could get a summer job or part time jobs while he is in the university to help him out in other stuff that he would be spending on. Tell him you would not be able to give him extra for trips he plans to take outside of school activities or night outs that he spends with his new buddies.
You should also discuss ways of saving up cash by being smart in his buys. Books for example, can be bought at a cheaper price if he chooses to buy second hand. He can trade in these books later on and get some cash for the next batch that he would need. Phoning home should also be regularized as your child would inevitably call collect or call you though his mobile phone line causing an upsurge in his phone bills.
Be honest with your child about where the money is going to come from and how much strain it would put on your personal finances if he would not help out a little. If you think that your child needs to practice in the first year that he would be taking over his finances, give his allowance on a weekly or monthly basis. This way, it would not be so difficult for him to wait for the next cash batch in case he runs out too early. It might be hard for you not to send money immediately but doing so would defeat your purpose of educating your child on financial intelligence.