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Financial Planning for College Students and their Parents

saving for collegeThe daughter of a Certified Financial Planner was the lead example in a Fox Business article about college students and finance: despite what she learned from her financial planner parent, this young woman still floundered when she reached college. As a child, the first year student had been required by her father to complete a spreadsheet for her lemonade stand…but during her first quarter college she overspent and failed to budget for all of the expenses associated with her studies.

For parents giving their children money for expenses, Fox Business suggests not giving them a semester’s worth of money at once because without experience even the most well meaning students may go through that money before the semester ends. Instead, you can provide one month’s worth of expenses at a time.

While some students get unexpected financial lessons during their first year, the findings of a recent poll from Citi and Seventeen Magazine found that many are implementing practices to get them on the right track: “4 out of 5 college students work while school is in session, 62% have created a budget and 77% pay their own credit card bills.”

Here are some tips to share with the college students in your life:

Comparison shopping: Some students just purchase all of the books on course lists at the school bookstore without considering used textbooks, e-book options, and without looking online for cheaper prices.

Budgeting: It is good to get into the habit of creating a budget before starting a career. Look for convenient online tools and smartphone apps if that is what will work best. Remind students that fun money needs to be included in their budgets.

Working part-time: While it is great to just concentrate on your studies, a part-time job may be necessary to cover expenses in order to continue studying.

Fee-only Financial Planner Claire Emory MBA, CFP, CFA of Clarity Financial Planning can help you and your family with financial planning before a child starts college and with adjusting your budget once you have a child in college.