Parents can teach students how to be frugal – before they go off to college. Students can track social spending, one of the biggest impulse expenses on college campuses. Learn how to save on books, essentials and entertainment costs.
Avoid the temptation of a credit card – According to DePaul University, “55% of college students acquire their first credit card during their first year of college, and 83% of college students have at least one credit card.” It’s too easy for college students with full course loads and a part-time job at best to land a credit card. Students who already have loans to pay off after they graduate do not need to add to that debt.
Making college textbooks hurt less – The biggest expense students are slammed with at the beginning of the semester is textbooks. First-year students have a penchant for brand new textbooks, but encourage them to buy used, shop online, find e-texts when available, or rent textbooks.
* Any student taking a Shakespeare class can read all of the bard’s plays for free thanks to MIT’s Complete Shakespeare.
* Look for books at the campus library as well as the local public library.
* Rent textbooks that you don’t need for your major.
Stock up on essentials – Students should pack dorm living essentials before they leave home. After a couple of weeks in the dorms, parents should find out what else the student needs, now that she has lived in the dorms. Many items will be cheaper to buy off-campus, including rugs, health and beauty supplies and non-perishable foods.
Distinguishing need vs. want – Students might need a laptop, but do they need or simply want a brand new tablet and smart phone? Teach students to buy only those things essential to your education and skip the extras for now. The best way to teach frugal behavior is to lead by example. Save up for luxury items and entertainment electronics, rather than swiping the plastic and teach students to do the same.
Tracking social spending – One of the biggest wallet-drainers is college is social spending. A late night pizza or the daily gourmet coffee from the off-campus coffee shop add up quickly. Encourage students to track social spending in a journal in order to gain perspective on how much is being spent daily, weekly and monthly. Check over the list and try to help the student make better choices.
* Reduce or eliminate meals eaten out when the bill for the dining plan has already been paid.
* Cut down on CD and DVD purchases by encouraging library use.
* Encourage the student to attend free or discounted concerts, plays, sporting events or special events on campus.
* Teach students not to be embarrassed to ask for a student discount at local movie theaters or retail stores offering one.
Parents, don’t be an ATM – Parents need to set the budget parameters with students at the beginning of each semester. If money is coming from home, send it weekly or monthly or it may all be spent in the first month of school. Teach the student how to budget money using a worksheet detailing common expenses. Be firm with the student about how much money they can expect to see, barring emergencies, and stick to it.
“Money Management and Budgeting for College Students,” National Park Community College
“Sample Daily Spending Diary Worksheet ,” FDIC Money Smart