In a recent appointment, I was talking with clients who are sending their daughter off to college for the first time. I was reminded that August is when many are going through this exciting, and sometimes scary transition. The majority of what my clients wanted to talk about wasn’t so much about how their portfolio was doing, but how they can help their daughter manage her own finances for the first time. As a parent having gone through this, I get it!
Here are a few things that came to mind which may help you or someone you know:
Decide who’s paying for what up front. Discuss with your student what you plan to cover (tuition, housing, meal, plans, and so on) and what expenses you expect your child to pay for.
Make a budget. Work with your student to figure out how much money they’ll need per month, whether using their savings or from an allowance you’re providing.
Don’t save them. It’s pretty easy to fall prey to sympathy for your student who is dealing with so much newness, but try not to just give in to the requests for more money.
After they prove themselves. Although you shouldn’t save them when they’re struggling to stay inside a budget, there’s nothing wrong with rewarding success at handling their finances. Perhaps a nice dinner at their favorite restaurant or a little extra cash left behind on a visit.
Provide motivation to do well
. If you are paying for your student to go to college, consider telling them you’ll pay for the spring semester in percentages based on how well they do in the fall.
It’s true that your child will face many challenges when leaving home for the first time. But, it’s much better for everyone if you are a little tough in the beginning. You would be amazed at how often the subject of dependent adult children comes up during client meetings! The universal plan is for our children to eventually learn to be financially independent adults, is it not?