Published June 25, 2012
The excitement of graduation is starting to turn into butterflies for incoming college freshmen as they prepare to head off to campus in August.
Before students pack their bags, families should sit down together and openly discuss expectations and establish a budget to ensure everyone is on the same page before the semester begins.
“Managing finances as a college freshman can be an even bigger challenge than navigating an unfamiliar campus or acing a calculus test,” says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial.
Here are tips from the experts about how incoming freshmen can start their college career off on the right foot.
Establish financial responsibilities. Parents should establish financial boundaries right off the bat and determine what expenses students will be responsible for, advises Linda Descano, president and CEO of personal finance site Women & Co.
“You might agree to cover all of their school-related costs, like books, technology, sports, and a meal plan – but ask them to be responsible for their own personal expenses,” she says.
Students may be interested in joining a fraternity/sorority or other extracurricular activities that can add onto the cost of school, says Sally Rubenstone, senior advisor at College Confidential.
“‘Who will foot the bill for extracurricular pursuits?’ is a timely topic for the family pow-wow,” she says.
Start saving this summer. A college lifestyle and the associated costs can be a shock to students’ systems—and bank accounts--if they don’t have a financial cushion.
“It’s never a bad thing to have some cash saved up to get a head start on all of the expenses that come with the beginning of the school year,” de Baca says.
Start building a positive credit history. Building a good credit history now is important for when students graduate and want to take out a car loan or rent an apartment and can even influence whether they get a job, Descano points out.
The CARD Act means most incoming freshmen need an adult co-signer to open a credit card account, so parents should take the opportunity to make sure students understand their actions can affect a parent’s history as well.
“To encourage students to use credit cards responsibly, some card programs reduce the annual percentage rate by one or two percentage points if students stay under their credit limit and pay their bills on time for several months,” Descano says.
Determine earned college-level credits. Before scheduling fall classes, incoming freshmen who took advanced placement courses and the tests in high school should determine if their scores are high enough to test out of any college classes.
Scoring high enough on an AP or IB exam may allow students to skip entry-level courses, saving time and money.
“For those who arrive as freshmen with enough credit to skip an entire semester or school year [can] take time off during junior year--to work, travel, do an internship--then return as a senior to graduate with one’s class,” Rubenstone says.
Address the frequency of parent/student communication. “Beyond setting budgets and creating financial strategies, it’s important for parents and students to have regular check-in conversations,” says de Baca.
Students and parents should decide on an appropriate amount of contact.
“If a mom anticipates daily texts or phone calls while the child feels that a weekly email is adequate, it’s important to air those differences before the school year starts,” says Rubenstone. “Don’t make a rigid plan because it’s like to be torpedoed by reality, but at least discuss what everyone expects and be prepared to make some compromises.”