College Student Allowance: A Parent's Guide
May 3, 2000
Determining a proper allowance for your college student is a decision that should be carefully considered. A number of factors should come into play when making this decision.
1) How much can you afford to pay?
2) What city is your child living in?
3) What meal plan is your child enrolled in?
4) Do you trust your child to spend wisely?
5) Do you want your child to learn the value of a dollar?
In addition to determining a proper allowance, I will discuss why it is essential to teach your college student about credit before they ever set foot on campus!
How Much Can You Afford To Pay?
College tuition is increasingly becoming more expensive every year. Paying for your child’s college education is probably one of the biggest investments you will ever make. In fact, a college education is now considered a substantial component of a child’s inheritance … an advance, so to speak. Sending your child to college is ideally the first step toward ensuring his or her self-sufficiency and success.
A student allowance is a part of the college expense. However, parents must first determine how much they can afford to pay. So, look at your budget and plan in advance for an additional burden. Maintaining your student away from home is much more expensive than maintaining him or her under your roof. So, become very familiar with your finances and determine how much you can comfortably afford to pay.
What City Is Your Child Living In? ?
The city that your child is living in makes a tremendous difference because the cost of living can change dramatically. For example, if your child decides to go to school in San Francisco or New York City (my home town) prepare yourself for the shock. The cost of living in these cities is ridiculously expensive, and your student’s allowance should reflect the cost of basic needs. However, if your student is attending a college in a smaller city or town, then breath a sigh of relief. It is much easier to stretch a dollar in this atmosphere.
What Meal Plan Is Your Child Enrolled In?
If your child is enrolled in a meal plan that covers at least two meals a day, then your child’s allowance should not include too much money for extra food. Oftentimes, new students socialize in the dining halls and little money is spent eating out. However, if your student is not enrolled in meal plan at the college, add at least $15 per day for a food allowance depending on how hungry your student gets. Another consideration is whether your student has access to a kitchen and refrigerator because preparing food at home is much cheaper than dining out!
All in all, I would recommend a plan that includes 14 meals per week, and a small allowance for outside food.
Do You Trust Your Child To Spend Wisely?
Whether or not you trust your child to spend wisely will determine the way in which an allowance should be disbursed. If you do not trust your child’s money sense, then allowance should be mailed once a week or once every two weeks. If your trust in your child’s money sense is moderate, then a monthly check will do. Lastly, if your child is a frugal accountant, then a lump sum per semester or quarter would be find, depending on what works for you as a parent.
The worst thing that you want to hear is “Mom, Dad, I spent all my money and I have nothing to eat. Please send more!”
Do You Want Your Child To Learn The Value of a Dollar?
If you want your child to learn the value of a dollar, then be sure to not give them too high an allowance. Train them about the value of coupons and saving. Give them an incentive to try to save money. For example, decide on an amount that would comfortable cover their cost of living and then tell them that they should be able to set aside some of this money to cover the costs of their Spring break activity. If they save x-dollars, then you parents will supplement this amount for their break!
Teach Your Kids About Credit Before They Go To College
The most important key is teaching your child about credit. Credit cards are thrown at college students daily. And students can be impulsive consumers on a fixed budget. Credit card companies count of this in order to generate interest income at the expense of your kids. Be sure to warn your student about the dangers of credit cards. Explain how interest works, and use real examples. And tell them that if they feel the need to establish their credit, then paying off their balance in full is essential! Minimum payments will only lead to trouble and stress.