Apr 14, 2017
Helping your college student set up and stay on a budget can be challenging if they have little experience managing their own money. Maintaining and forecasting expenses can help your student graduate college with less debt and help them manage expenses after college.
Use these tips to help your student manage their money:
For college students, it may be helpful to set up a budget by semester and track progress on a weekly or monthly basis. Help your college student calculate income from sources such as financial aid disbursements and part-time jobs, minus expenses such as tuition, fees, books, living expenses, clothes and activities. There are multiple ways to manage a budget, but if possible, follow the 70-20-10 rule by allocating 70% for living expenses, 20% for savings and 10% to pay bills.
Shopping online is a great way to save money, especially if you can find deals that include free shipping. Consider signing up for newsletters or mailings that alert you of upcoming sales. Renting or purchasing used textbooks online is also a great way to save - students can save up to 70% off textbooks by renting them.
By using cash whenever possible, your college student can more easily track small expenses with their budget. Budget cash weekly or monthly to cover small purchases such as eating out and entertainment, and remember once the cash is gone, it is gone until the next period.
Credit cards can help your college student establish credit, but it's important that they have the knowledge they need to make wise credit decisions. The basic principle with credit is to use it wisely and spend within your means. Your college student should always pay on time and pay off the balance in full every month. For more information about establishing good credit visit Discover Student Loans.