Countdown to College

Going off to college is an exciting and emotional time – for both you and your kids. There are new responsibilities and unexpected decisions they will have to make, especially about their personal finances.

Take the time to teach your kids a sense of financial responsibility before they get to college by spending time talking with them and making sure they understand their financial situation.

Begin with a budget

Help your kids establish a budget. The best way to manage money is to understand where it’s going and a budget will provide a sound method for tracking spending habits.

Banking needs

How are day-to-day expenses going to be handled — checking account and ATM, debit or credit card? Find out which financial institutions are located on or near campus, either as ATMs or office branches, and get as much information as you can on transaction fees, holding periods on deposited checks and service charges.

Keep in mind that many banks offer online banking services including access to account information, bill paying, customer service and daily account balances.

If you decide that a credit card is a good option, read the fine print and be sure to shop around. Make sure your kids understand the significance of establishing a good credit history and how quickly credit card debt can add up.

Managing expenses

Sticking to a budget is important. So, make sure to leave some room for those unanticipated expenses that can often strain the budget, like:

• Phone calls
  Long-distance calls can be costly. Why not give your kids a prepaid phone card so there won’t be any surprises when you get your phone bill?
• Laundry
  The cost for washing loads of dirty clothes adds up. Quarters can be hard to come by, so encourage your kids to save them whenever possible. If they live close to home, let them bring their laundry home every so often. It’s a good excuse for sneaking in a visit.
• Textbooks
  Used textbooks are usually much less than new ones. Buy early, though, as used books go fast. And be cautious about buying textbooks online. The books may be discounted, but by the time you pay for shipping and handling, they may not be such a bargain.
• Appliances
  Have your kids contact their roommate before shopping for the dorm room. Why end up with two refrigerators, microwaves and toaster ovens?
• Coupons
  Help them save money at the grocery store by saving coupons for them. Since students don’t often get newspapers at the dorm, they don’t have the opportunity to clip coupons.

As your kids begin college, they’ll be learning money management skills. Help them learn the basics, and with some practical experience, they’ll be finishing the year in fiscally fit condition.