College is a time for learning and personal growth.
And some of that actually happens in the class room. But as anyone who has lived through those years knows, a tremendous amount of learning takes place outside of the classroom.
If you are a parent that can pay for the expenses involved in your child’s college education, that’s great. But if all you do is pay for college (and thereby keep them from running up education debt), you may be missing a unique opportunity to provide something college can’t give your child – an education. An education, I should say, in personal planning, discipline and accountability.
Mom…Dad…if you, as a parent, are paying for most of your child’s college education, you have the right (and I’d say the parental responsibility) to require financial engagement and responsibility from your college student. And even if you aren’t paying for college (i.e., you child is getting loans), you should strongly encourage them to do the following:
1. Manage a personal checking account. Your college student does not need to be living out of your checking account, as he did in high school. It only teaches him that every time he swipes a debit card, someone else will pay the price. At a minimum, he needs to manage a checking account of his own, into which limited resources are deposited each month and from which he must prioritize (and control) his limitless wants.
2. Manage with a monthly income. If you are the source for some or all of your student’s financial resources, you and your child should arrive at a predetermined figure that will arrive each month into her checking account. She may earn some of the money through part-time employment. Or you may simply deposit a sum each month.
Any of these things can be translated into her monthly income. She needs to have a clear understanding of where this is coming from and (most importantly) that there isn’t going to be any more if she runs out.
3. Manage a monthly budget. Give your child the assignment to create a monthly budget. It may be very, very simple at first, especially if she is living on campus and eats most of her meals on campus.
But if she is living off campus, buying her own food, driving a car, etc., this budget is an absolute must.
4. Provide a monthly accounting. I’ve had four children graduate from college and all four spent some time on campus and some time off campus. In each case, they created a simple budget plan. But as I explained to them, that was only the first part.
Every month, they were required to send me an email demonstrating how they spent their money. This ensured they kept up with their expenses and knew where their outflow was flowing out. The monthly accounting is a valuable personal habit that helps keep you on track and identify any problem areas before they get too big.
Be sure that while your child is in college, she’s getting an education in handling all that money she’ll be making with the degree she earns.
Offering you Wisdom on Wealth, I’m Byron Moore.
