Believe it or not, summer is almost over for college students. For many incoming freshmen, college represents their first opportunity to live on their own with adult responsibilities. It seems like only yesterday that you were teaching them to tie their shoe. Now, they will be studying calculus and Descartes. Amid all of the preparation and emotion, don’t forget some important financial considerations.
First of all, set a budget for spending money. By now, you have probably recovered from the shock of the big ticket items such as tuition, room and board, and books. Equally as important are all the little things that can quickly add up into hundreds if not thousands of dollars. Pizza on the weekends, Starbucks every day, movies, concerts, and other social expenses can be difficult to control for a student just learning to make financial decisions on their own. Throw the convenience of a credit card and some peer pressure into the mix and you have a recipe for overspending. Establishing a weekly budget for these items helps students make rational decisions. Why weekly? Because that is about the limit of what these young folks can track.
Secondly, put a “banking plan” together. What does this mean? This means establishing a plan on how your student will keep and spend their money while they are at school. It is best that they do not keep much cash on them or in their dorm room or apartment. Somehow it tends to disappear.
You want them to be able to use ATM’s frequently for cash needs. Make sure there are ATM’s conveniently located that can be used without fees. At $3-$5 per transaction, ATM fees can add up quickly. If this is a problem for your current bank, consider opening an account with a local bank that has convenient ATM’s on campus.
Strongly consider a debit card instead of a credit card. Set up the account so that you are able to electronically transfer funds to your students account as needed. Also, insist that you have the ability to view the account online. They won’t like it but as long as you are providing funds, it is reasonable to monitor spending. Be sure not to micromanage the account. This is a great opportunity for them to learn money management skills. That being said, I once had a client who saw online gambling charges on their college student’s account.
Establishing a budget and banking plan for college students is a great way to control spending and learn fundamental money management skills. Now is the time to begin working on the plan with your student. This will allow them to concentrate their time and efforts on their classes once school begins.
Thursday, July 30, 2015
Thursday, July 23, 2015
Coming off the July 4th holiday I read a few articles about some incredibly unfortunate choices that were made with fireworks and alcohol. One article I read was about a man who lit a firework off of his head and died. In the end of the article it stated that his family had set up a GoFundMe account to pay for funeral expenses and I quote, “because sadly there was no life insurance.” I am sympathetic toward this family, however I hope we can all learn from this situation. If we have money for alcohol and fireworks, don’t we have a few dollars a week to get some basic life insurance coverage? The article did not say that the man was underinsured (which many people are), it stated that he had no insurance. The article below is a good read about people’s insurance needs shifting based on their stage in life. As always please reach out to your Argus advisor for customized conversations to your situation.
Read Full Article Here
Read Full Article Here