College can be a money pit if students don’t know how to manage the money you provide them or the money they earn. Like many other aspects of college, learning how to manage money is an important lesson that is often learned in college.
Some students act very irresponsibly when they start in college. Some typical examples of this irresponsibility include:
- Signing up for credit cards in their name when they know they don’t have the funds to pay for their credit purchases
- Spending outrageous amounts of money on the weekend at local bars
- Going on shopping sprees with friends
- Taking trips on a weekend and spending money that they didn’t plan to spend
- Spending money on drugs
- Using their parent’s debit card without giving much thought to how much they have spent
- Gambling on-line
What can you as a parent do to help your student become responsible at managing money? Here are some suggestions.
- Set up a debit card for your student. Deposit a monthly allowance in the card. Do not let your student have an open credit card.
- Have your student use one of the Apps for recording expenditures. This will help them set up a budget and anticipate expenses.
- Let your student know that you will not be responsible should he/she take out a credit card and run up debt he/she can not pay off.
- Set up a four-year plan for the money your student will be given above tuition and fees. Gradually reduce this amount each year and require that your student start earning money for non-educational expense. (A $10 drink takes on a new meaning when that equals an hour of work).
If students do the right thing and find a summer internship, they can begin to take care of most of their own expenses. By the end of their college years, most students should be ready to take on their own financial affairs..