When your child takes the leap toward higher education, it can be a big step for parents too.
Outside of the obvious lifestyle and educational adjustment, managing money tends to be difficult during this time for students. Some students aren’t aware of how to track their spending, budget, or even save money.
As a parent, you know your child best, and you know what they could work on to improve their financial wellbeing. Here are financial tips to support your college student on their journey with managing finances independently.
Financial Tips for College Students
Every college student’s lifestyle is different. For example, monthly expenses will vary greatly depending on if your student lives on or off campus, if they have a safe car for commuting, if they have a pre-paid meal plan or don’t, etc.
So to begin, determine major expenses upfront to figure out the cost of basic necessities like food, rent, and transportation.
Knowing this will help your student understand where potential shortfalls may occur during the month or throughout the semester.
Mapping Out the Future
Attending a University or Technical Institute is an investment in your child’s future. And, according to the Alliance for Excellent Education, approximately two thirds of careers today require some form of postsecondary education.
If your student wishes to work in a high-paying job, then getting a certification or degree is the most definite path for achieving their goals. Explaining this to students can help them understand the impact of their education on their lives financially going forward.
Balancing a checking account, class schedule, and extracurriculars is no easy task—especially for 18- or 19-year-olds just starting out. Money issues are likely going to happen. So as a parent, try easing their stress with open and clear communication around money.
Establish a budget and savings account to lower the chances of financial hardship. Putting together an emergency fund can also be a good way to relieve stress with a cushion for unforeseen expenses.
Planning Out a Budget with Your Student
After a student understands major expenses like food, rent, and transportation as well as an emergency fund and savings account, it’s time to get out those calculators and begin a budget!
Setting up a budget has long term benefits. Some folks even in their late 20s and early 30s are under the impression that money rules them and not the other way around. In fact, Credit Karma found out that 85% of millennials say they’re too burned out to deal with their finances.
It’s empowering to give students control over their funds with a budget.
Try the 50/20/30 budget to determine a monthly budget.
- 50% of the budget goes to needs (food, rent, transportation)
- 20% of the budget goes to wants (Spring Break vacation, shopping trips, other luxuries)
- 30% of the budget goes to a savings account
This approach is a simple way to budget on a monthly basis while building up savings for your student.
We Can Help You Monitor Spending
To reinforce their budget while away from home, a parent can set limits on their child’s purchases by using CardValet®.
CardValet® is an app on your phone that allows you to turn your student’s debit card “on” or “off” anytime. You can also:
- Define geographic areas where the card can be used
- Limit purchases by the type of merchant (i.e. gas station, restaurant, grocery store)
- Set a purchase amount limit
Use CardValet to also view recent transactions. You can look at both pending and posted items. Simply tap a transaction to see details such as merchant name, location and dollar amount.
Download CardValet today by visiting your phone’s app store.
Our team of personal bankers are here to help you and your student get started. We want to help your child succeed at school and to manage money! Reach out to us with any questions or if you need help with getting your child a debit card or their own American Bank & Trust checking account.
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