If you have a child heading off to college this fall, your to-do list is probably jam packed with items you need to buy and paperwork you must fill out. However, before you send your child off to school, make time to sit down and create a college budget.
Regardless of whether your child has a job, or you are giving your child spending money, there are ways to ensure he or she does not run out of funds within the first few months at school. The right planning can make all the difference. Here are some tips to help get you started on planning a budget for your college freshman.
Before you begin setting up a college budget, take time to understand the importance of being flexible when establishing spending limitations. Since neither you or your child knows exactly what to expect just yet, establishing strict limitations is not a good option. Rather, focus on setting realistic limitations on the total amount your child can spend based on how much money is available. Include any savings collected over the summer to create a solid outline for the budget.
Calculate Set Expenses
Start out by calculating the sum your child’s fixed expenses, which may include car payments, cell phone bill, rent, and utilities. Additional costs such as textbooks, room and board, and tuition should be paid for with loans, scholarships, grants, or money you have saved for your child’s education.
Access Flexible Expenses
Flexible expenses will be the costs of laundry, groceries, entertainment, clothing, grooming, transportation, food separate from your child’s meal plan, and anything else that can fluctuate depending on the month. While it might be difficult to estimate these expenses, you can request a sample budget plan for incoming freshman students from the school’s financial aid office, which can help you get a better idea of how to make an average estimate of all flexible costs.
Break It Down by Month
If your child has a large sum of money for an entire semester, he or she can easily end up spending it all during the first few months of classes. If you break the budget plans down into smaller portions and make a set amount of money available for spending each month, your child won’t make the mistake of spending an entire semester’s worth of funding in a short time. If your child does mismanage funds one month, breaking funding down ensures your child can begin again next month and recover from the mistake.
Establish a financial organization system for your child while he or she is at school. You may want to keep most of your child’s money for the semester in a secure savings account and set up automatic transfers to occur at the start of each month. Keeping most of the money in a savings account will allow the savings to earn some interest and ensure your child has access to the set amount of money at the same time each month.