The kids have been off to college for a month or so now and the house has a peaceful quiet to it … but soon financial worry may begin to set in. Where is their money being spent? Have you given them the financial tools they will need to successfully navigate through their college years?
As a parent, it is our responsibility to prepare our kids for not only the stresses and excitement of college but how to be financially responsible by creating a budget and spending within their means.
When your child is in high school, a budget isn’t something they are particularly concerned with. They may have seen you sit at the kitchen table, planning out the bills, making grocery lists and meal plans, but they are usually living off the income from a part-time job and you. College life throws then a whole new curveball. Teaching them how to budget what they have every month will relieve that stress from them. Check in regularly to see how they are managing. The trick to a budget is sticking to it. Talk to them about the importance and necessity of sticking to the budget and the pitfalls and issues they could face if living outside of it. Offer them suggestions and tips on how to stay within their limits but still enjoy college life with free school events, or local community events, outdoor concerts, community sporting events and the like.
When setting up a financial plan with your college kid, speak their language. They are far more apt to use a smartphone app or free online service than sit down with an Excel spreadsheet and track their spending. Find a program that they like and work with it. Kids today are all about quick and easy. If a financial plan is too complicated or time-consuming, chances are they won’t stick to it or keep it up to date. College life is a totally new experience. For many, it’s the first time they have lived away from home, so making the financial minefield easier to traverse is the best way to help them stick to the plan. See how they are managing so far, what problems they have faced financially and how you can work together to fix them.
Suggesting a financial limit doesn’t mean your child is going to actually stick to it and, while you can’t hang over their shoulder, it will possibly give them pause before deciding whether or not they need a brand new cell phone. Keep it low, and talk to them about why it is important to keep unnecessary purchases within that limit.
Check in with your kids and try to be interactive but not overbearing in their financial decisions, while still reminding them of how important it is to stick to the plan you have both laid out. If they do end up strapped for cash, and you can help out, send a care package of non-perishable food and household items that they can use until they are back on track.
Keenans Accounting Service was founded in 1998 to serve the Midland and surrounding area.
We’re a professional team dedicated to helping you define your bottom line.
We keep a keen eye on your numbers so you don’t have to.