Money management is a great skill to prepare your college student for adult life. One way you can teach this skill is by establishing a specific college budget for living expenses and spending money. I struggled with how to do this when sending my daughter off to college until I got some great advice to set her up with a weekly or monthly allowance.
My daughter will have a job on campus to cover the majority of her living expenses and spending money. My husband and I agreed that until she gets up and running with consistent paychecks, we will provide an allowance at the beginning of each month that she will have to stretch out to cover everything she needs for the month.
It’s hard to get the college budget right the first time because you can’t really predict how much your student will need. What helped me was to break it down week by week. I tried to determine what was reasonable for “fun money” to cover meals out, outings with friends and tickets to movies, plays or other things that were not free on campus. Then I thought about the cost of the basics — soap, shampoo, toothpaste, makeup, etc. — and how long these usually last.
I added a little extra into the first month’s budget just to make sure she didn’t run out.
We created a spreadsheet so she can track her expenses and adjust the budget as needed, especially after she starts using her own earnings. There are some great online tools to create and track budgets, including Mint, Yodlee, and Buxfer.
We made a deal with her that if she runs out of allowance before the end of the month, she will have to justify why she needs more. It will be at Mom and Dad’s discretion as to whether we approve the extra expense and how much more we will provide.
How did this all work out? I’ll let you know in a couple months!
Photo Source: Flickr