The fall semester is in full swing, so it’s a good time to review your college student’s budget. Is your student spending more than you expected in any area? If so, here are six steps that can help get them back on track this semester and beyond.
1. Set a more realistic budget
Two of the biggest mistakes parents and students make when setting a budget for college costs are underestimating some expenses and forgetting to include others. Here are some general benchmarks (from The College Board, Kiplinger.com, and other sources) that can guide your revised planning:
- Typical spending for books, supplies, and lab fees runs just under $1300 a year.
- For transportation to and from school, average spending is about $1200 per year.
- The annual tab for personal living expenses, including entertainment, is about $2,000 per year.
- Sports clubs can run about $2,500 per year.
- Students can spend up to $1,300 per year for on-campus parking.
Note that specialty majors, like music and arts courses, often call for costlier supplies than other courses of study. Check with your student’s professors or department heads to get a better handle on the cost of those extra supplies.
And pledging a sorority or fraternity can add thousands more per year. Make sure your student knows the costs before deciding to go Greek.
Finally, consider the cost of unexpected computer repairs. You may want to check out a protection plan as insurance against an all-too-common crash.
2. Rein in credit use
Perhaps your student is overspending because he or she has unchecked access to a family credit card? If so, a card with a low limit ($100 to $300, for example) or a prepaid credit card can help curb the urge to splurge.
How? They give your child a chance to use credit but with a safety net, letting them establish good financial practices without the risk of excessive spending.
3. Track spending in real time
The best budget in the world won’t do any good if your student doesn’t have a way to track spending. A good app can offer a lot of help here. Some examples:
- Mint handles budgeting and money management in real time; students receive instant feedback on whether they are spending too much and on what.
- Venmo offers mobile payment services so students can easily split dinner tabs, Ubers, or concert tickets. It also instantly transfers money between friends (to reimburse a roommate for buying a latte, for instance).
Your student’s bank may offer its own money management apps as well. Apps are simply a great way to help your student take charge of their spending with confidence.
4. Pocket valuable student discounts
Many retailers and websites offer special exclusive discounts to college students that can help slash expenses. Check out deals like these:
- Flash that student ID card. Many restaurants and retailers offer student discounts ranging from 5% to 20%, even if they don’t advertise it. Ask about discounts everywhere you shop.
- Scour the web for student discount deals. StudentRate, for example, lists hundreds of local, special deals available to your student every day.
- Students can save big on wireless service from the major carriers, with discounts ranging from 8% to more than 20%. Visit company websites for up-to-the-minute deals.
- Get the best deals on textbooks outside the campus store. You can find deeply discounted used or rental textbooks online at Amazon and many other websites. Example: Check out Chegg to buy, rent or sell textbooks in a flash.
5. Find a part-time job
If your student has slashed expenses as low as they can comfortably go, getting a part-time job to increase income can help.
One great option is to work for the school through a work-study program. For the best chance of getting one of these coveted positions, make sure your family’s FAFSA (Free Application for Federal Student Aid) is filled out as early as possible every year, as these jobs get snapped up quickly.
Should a work-study job not pan out, there are still plenty of ways for students to find a position. Most schools have career centers with current part-time job listings, many of which will be on or close to campus.
6. Explore alternative funding
If all other efforts to balance the budget fail, you may want to consider borrowing money. One possibility: Some lenders offer special loans for college costs that aren’t covered by grants, scholarships or federal student loans.
A stronger financial future
With these resources and tips, you can help your student learn to stretch every budget dollar and manage credit responsibly. What’s more, perfecting these skills now, while they’re still in school, helps set a firm foundation for their future financial health.