When preparing our children for college, it is important to teach them financial responsibility.
Budgets are a great way to teach our students how to manage their money. A budget will help students learn how to manage their money even after graduation.
Here are six tips to help you create a budget for your college student!
1. Maintaining a Budget is Important
It’s important to have a budget if you handle money. A budget can help you achieve your financial goals or save money in case of an emergency, no matter what age you are.
Here are some more reasons why you need a college budget for your student:
- Teach financial skills. Budgets are a great tool to help your student develop the financial skills that they will need once they graduate from college. This helps them to learn how to prioritize their spending, paying for the most important items first. For example, rent, tuition, food, and insurance. Before they can spend their money on fun things.
- Tracks your goals. Budgets allow you to track your goals and see where you stand in relation to them, whether it’s funding an emergency fund, purchasing a house or car, or saving for an unexpected expense.
- Knowing where your money is spent. With a budget you can track how much money you spend. It will help you to see if you’re spending too much money on things like eating out and fun activities. You can also help your student develop better money management habits.
2. You Can Have Fun Still
Budgeting doesn’t mean that you can’t have fun. You can teach your student how to spend money guilt-free by creating a budget.
You might, for example, set a weekly budget to eat out with friends. You can set a budget of up to $50.
When it comes time to pay rent or tuition, your college student will not be left wondering how they’ll afford the essentials.
3. Budget together
It may be the first opportunity your child has to manage their own finances and pay for expenses. Together, sit down and make a budget. You can estimate the expenses that they may have in this year.
Create categories for every expense and then divide it by month to keep track of those expenses. Comparing and contrasting their monthly spending as the school year progresses is a great way to track their expenses. You can then make any necessary adjustments.
Include these items in your budget for college students:
- College education
- Rent + renter’s insurance
- Paying for car + insurance
- Utilities
- Food
- Clothing
- Enjoy the Entertainment
- Eating out
- Savings for emergencies
- They may also have other fees or financial goals that they wish to achieve
4. Keep Track
Apps are the best way to help your student keep track of his or her budget!
5. Set Money Boundaries
You should discuss money boundaries when you are talking to your child about a college budget. You will both be aware of the costs you will incur and those that your child will have to pay when attending college.
Write it down to help you and your partner remember what you have agreed upon.
6. Talk about Getting a job
Part-time work is a great way to ensure that your student has a steady income during college. Your child working during school breaks, summer or college classes.
It may be better to let your child spend their first semester in college focusing on the schoolwork and getting used to things. You and your child can then decide if they can handle both a college course load as well as a part-time work.
Make sure that your child does not work too many hours and their performance in college will suffer. Keep in mind that their college classes come first!