The temptations, responsibilities and pressures of college life can lead to financial stress for many students. Parents often want to find ways to help their college-aged children deal with financial stress while still giving them the independence to make their own financial choices. Helping your college student learn to budget and face financial responsibilities can have long-lasting positive benefits for both you and your child.
Develop a Budget
A budget will help your college student reduce financial stress by planning for expected and unexpected expenses in advance. Sit down with your son or daughter and help your child develop a budget for the semester or year. Encourage your child to stick to the budget as closely as possible to avoid stressful financial situations such as an overdrawn checking account. Help reduce your college student's financial stress in times of emergency by preparing for unexpected expenses. Show your child how to develop an action plan for building a savings account or special fund that can be used only in case of emergency, such as a car repair.
Keep an Open Dialogue
Make sure that your son or daughter is aware of your family's financial situation before college starts so there are no misunderstandings that could lead to extra financial stress. For example, make sure that your child understands how much financial support you will be providing and if you will bail him or her out if financial trouble arises. Continue to have periodic family meetings to discuss any changes that need to be made to reduce financial stress for everyone. Communicate the importance of paying bills on time so there are no late fees. When bills are paid on time, financial stress is lessened.
Encourage your son or daughter to shop around to find the best price on textbooks or other class materials. Online shopping or buying used textbooks can save a college student a substantial amount. Look for less expensive housing options and shop around for the best price for cable services or other utilities. Some utility companies may offer a lower rate to entice new customers. Financial stress will be reduced when your son or daughter is responsible for less of a debt load.
Monitor Credit Cards
Even though most college students are of legal age to apply for credit cards, parents can help students avoid future financial stress by limiting access to them. You may choose to give your son or daughter a debit card instead of a credit card. Monitor the account regularly for unnecessary spending. Realistically consider your college student's personality and determine if your child is mature enough to handle the responsibilities of a credit card. Talk to your son or daughter about how to avoid financial stress caused by high interest rates and credit card payments by always making payments on time and paying more than the minimum amount, if possible. If your child is already having trouble, help him or her to create a reasonable payment plan to reduce the debt load over a specific amount of time.