Dear Kim,
We are sending our daughter off to college this fall. Do you have any tips on how we can help her manage her money? -New College Parents
Dear New College Parents,
Congratulations! And, as a matter of fact, our daughter is going off to college this fall, too. Here are a few things I’d suggest:
• Be a joint owner on your daughter’s account. This will allow you to monitor expenses so you can discuss anything that needs attention quickly, before financial problems arise. It will also allow you make deposits easily, and that can come in handy for you and for her!
• Sit down and discuss a budget before she heads off to college. Explore the expected expenses and, together, figure out the reasonable extras. As your daughter manages the extras she will being to develop and strengthen their money handling skills. We are trying to figure out the right amount for our daughter, too. We want her to have enough for essentials but we are not going to fund her Starbucks habit!
• Over time, have discussions about how income she may have from a campus job can be used for expenses and savings. Together, you may find the dollar amount set aside for extra expenses needs to be adjusted along the way, or you may find it was just right. Either way, the discussions of her income and expenses will help develop her critical thinking skills in the area of managing her money.
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• Be sure she has a debit card, and knows how it works. Share the pitfalls to avoid. For example, small expenses are easy to forget and add up fast. Let her know it’s not big expenses that tend to cause problems. Bigger expenses are expected and easy to plan for. It’s the few dollars spent here and there that often go unnoticed, and that is what could derail her. You may want to ask her what she’d spend in a week if she had a $3 snack every day. A college-student-to-be is likely to come up with $21. You might then suggest $84 a month could make a big difference in her available cash!
Good luck to you and your daughter in this new adventure! -Kim
Kim Sponem is CEO/President of Summit Credit Union, a $2 billion, member-owned financial cooperative with more than 136,000 members. Kim has a passion for empowering people to improve their financial well-being for a richer life.
Ask Kim your money questions by emailing: SavvyMoney@SummitCreditUnion.com
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