College is a series of first steps for students.
It's the first time they've been living alone, being in charge of every meal, handling their clothes, and even completing their homework without you there to help. However, parents struggle to know whether or not this independence should come with financial help. Should a college student receive a stipend, or should your child work while in college to earn his spending money — or a little of both?
If you're thinking about your child getting a job in college, research shows that most students work while they go to school. Four out of five undergraduate students work an average of 19 hours per week while pursuing a degree. Some parents say they want their children to focus on academics rather than making money. Others say that learning to juggle multiple responsibilities, such as classroom and work, is a part of life. Whether or not you give the student an allowance, here are some tips to make sure your child knows more about the importance of budgeting.
Talk About Finances
Have your child share basic budgets at home before they go to college – the sooner the better. If you are able to instill knowledge about money and budgets in your child at a younger age, he will be much better at managing money independently when he is out of school. Talk about the difference between needs and wants and how they affect the budget. That way, when faced with putting fuel in the car or buying $5 coffee, your child will have a clear process in mind about their choice.
OPEN A CURRENT AND SAVINGS ACCOUNT
Before going to college, open a checking and savings account with your child. Help keep track of what's coming in and what's going out so they understand how important it is to know how much money they have at any given time.
Discuss School Loans
Sixty-eight percent of students have debt after college, averaging $30,100 per student. Talk with your child about the cost of college, how much debt he might have after graduation and how much he would have to pay on a monthly basis if he had student loans to pay off. Most student loans have a grace period of six months before your child needs to start making payments. If they gained work experience while in school, it may be easier for them to find a job right after graduation — long before the grace period ends.
Discuss Job Opportunities
There are plenty of job opportunities for college students on campus. Some are part of work-study programs; Others involve administrative and maintenance work, including work in the kitchen or dormitory. Working in college, even if it's 10 hours a week, can give your child a sense of responsibility and pride in what he earns. When they work for their own money, your child will gain a better understanding of the effort involved in earning it, and they may think twice before giving in to petty temptations.