One of the questions I’ve heard from parents every year is “how much money will my student need for outside expenses?” They’re thinking about expenses such as pizza with friends, toiletries, snacks, entertainment, etc. And while sometimes these expenses can get out of hand, they are valid—in moderation. So, how do you determine how much your student needs and how to manage those dollars?
Tried and True
For years, parents have provided allowances for their students in college, often handled through joint bank accounts. These still work fine, whether managed at the bank directly or online. As for how much money to provide for your student, a number of sources have suggested between $100 to $300 a month for outside college expenses, though I think the $300 figure is on the high side. Keep in mind that some students will need to purchase school support supplies such as safety goggles, paints, drawing paper or special software packages that may raise their semester expenses. In short, all students and their needs are different, and family members would be wise to keep that in mind when working on a budget.
Budgeting and Keeping Track
As for keeping track of dollars—and planning how to spend them in the first place—there are several tools families may use. This post from Nerd Wallet reviews finance apps they recommend for college students to help them with budgeting, tracking spending, and building credit. Some experts suggest sitting with your student and talking about expenses so they have a good idea of how much financial support they can expect from you. This is also a great time to emphasize the need for managing money carefully. A student I worked with several years ago had to tell her friends in college she couldn’t afford to get fast food every night, because she knew how far her allowance was going to stretch. Eating out several times a week wasn’t going to cut it for her. You student should know how far their dollars have to stretch as well.
Here’s a strategy: place about half a semester’s funds into an account your student to start. That way, if they’re on pace to outstrip that in four or five weeks, they know they need to slow down. On the other hand, if they find those dollars may last them most of the term, you may have budgeted too much, or they may do doing without unnecessarily. That second point may seem odd, but in truth, you don’t want your student being the only one who never gets pizza on a Saturday night with their friends. Moderate spending means moderate indulging at least some of the time. I suggest that a monthly check-in on finances with your student is an excellent way to keep lines of communication open and help them learn how to manage their money.
Working While in College
Of course, your student can reduce their financial pressure by working in college, as I noted in this post about on-campus jobs. This is always an option—again in moderation—and has the added benefit of giving your student work experience, and a possible mentoring connection to an office or department on campus. And while that mentoring connection may not happen with off campus jobs, they can be helpful as well.
The bottom line is to plan the budget with your student, and help them learn money management now rather than after they graduate. They’ll thank you for it.
