Money matters: how do you manage the cash flow with your college child?

[UpperValley]

I have a question for fellow parents: how do you manage the "cash flow" with your college child?

Do/did you send them an annual lump sum to cover your EFC + other financial support?

Do/did you paid the university directly (e.g., sending money to their university account directly)?

[07DAD]

S's mother and I split all costs that S was not required to cover from his earnings/savings. She transferred a set amount to him each month. I did mine as a lump at the beginning in Fall and after Winter break. We both deposited into an account he had at a bank not into a university account.

[jym626]

You might want to do a search here as this has been discussed before many times, with lots of helpful advice. We calculated monthly expenses and transferred it into their account at the beginnig of each month. This was for personal expenses- not tuition, etc. We paid school costs directly to the school.

[CalAlum]

Like others here, we paid school costs (tuition & board) directly to the school.

From the age of 12 onward, both kids had been enrolled in the "Parent Bank." This is a system where the child receives a set allowance per month with the option of investing any leftover money in an account which we parents run. We fund the "interest" in each child's Parent Bank account to the tune of 10% per year, so there has always been a strong incentive to save money, rather than spend it. By the time both went off to college, we knew they could live within a budget, no problem.

We sat down with both son and daughter and discussed the costs of textbooks, occasional necessities, and recreation. The goal was to live frugally but still occasionally have some money to see a movie with friends, go ice-skating, etc. We made a budget together and then gave our kids a lump sum at the start of each semester, rather than at the start of each month. This usually worked fairly well, but we had to recalculate everything one year when our son's required Japanese textbooks and learning materials alone cost over $650.00. Ouch.

[SteveMA]

Our older two were able to pay for their schooling out of summer earnings after scholarships, etc. so we sent money just for fun stuff every once in a while. Sometimes I put $20 in a card, other times I transferred money online into his checking account. We paid for books once for each because we wanted to.

For our next two, if need be, we will pay the school on a monthly plan (that was the plan for the other 2 but didn't need to). I see no reason for the college to hang on to our money from August-May when we can still be earning interest on those funds . The kids will be paying for a large portion of their schooling through scholarships and summer earnings though.

[ucbalumnus]

When I was in college, my parents just loaded up a bank account with the year's cost of attendance (which was not all that much compared to today) and told me to pay all of the bills and other costs out of it. Which I did, going under budget and having money left over.

However, I can see that not working for students with reckless spending habits. In that case, it may be necessary to pay tuition, fees, room, and board directly to the school (and off-campus provider for off-campus housing, if applicable), and ration out remaining costs monthly or semesterly. But, at some point, the student needs to learn how to manage his/her own personal finances.

[cromette]

D2 has 2 accounts of her own that she operates out of.

School is paid from her main/big account that's based at home with funds from summer work. The rest is covered by scholarships and loans.

She has a local account that is easier for her to deposit money into and use for cash on hand.

We help her make sure all college expenses are fully met, all the boxes are "ticked", and then she's pretty much on her own.

We reimburse for car repairs, medical expenses, and we send her gift cards to restaurants and Starbucks from time to time. "Major" expenses like a spring break mission trip ($500), she asks for help on and we are usually happy to do that.

She's naturally frugal and very responsible, so it's not a big issue. We've only had a few incidents that I chalk up to naivety - but they were minor and learned from.

[siemom]

We pay tuition/room/board directly to the school. DS has his own account with funds that he has earned or been gifted that he uses to pay for everything else. We have also given him a credit card from one of our accounts which he can use for bigger purchases (books) to help him build some credit. He is a very frugal and responsible guy; we are encouraging him to spend more money on fun

[cptofthehouse]

What works best depends on your student. Some might need some help with budgeting and it's good time for them to learn. So giving them one big lump sum at the beginning of the year. It takes time for most people to get the discipline and knack of budgeting, and some people never learn. But by starting out with monthly expenses, and easing into making the student more and more responsible for paying for himself, the transitions can be smoother and mistakes and over spending be kept to a minimum.

One of my kids started out with just a monthly allowance and a credit/debit card with about $500 credit on it and a couple of hundred dollars in an account to back it up. We handled everything else regarding his college expenses that year. By the time he graduated, he was handling it all. We just gave him the money as he requested it, often at the beginning of the semester in a lump sum. He lived off campus by then and had food shopping expenses as well as rent and utilities bills and had to coordinate with roommates. It took him three years to get there, and he took on a bit more each year. My current college kid pretty much took care of it all from the get go. We just paid his university bill which is just about what we've agreed to pay altogether, and he handles the rest by himself.

[mathmom]

We have a joint account. Son gives us a record of expenses we've said we'll pay (books, laundry) and he takes care of the rest. We pay tuition and room and board directly ourselves. Our son is very much a pennypincher so we do occasionally offer to pay for experiences he's reluctant to fork over his own money for. (Right now field trips to see things on the weekend in Jordan or the surrounding area.)

[MereMom]

We pay what is left of tuition directly to school (she has generous scholarships).

Now that DD lives off campus, we put rent and our agreed budget for utilities and food for the semester into her home checking account which I am joint owner of. She does all the transferring to savings and to her local checking account. She is responsible for spending money, books & supplies and any excess utility/food costs above our budget.

She and her roommates are good at conserving energy use and shop sales/use coupons for food, so she usually has money left over. That is hers to do with as she sees fit. So far she has added it to her savings, for a rainy day she says. We will take her grocery shopping or give her a little fun money when we visit (we attend all her home meets) but nothing else.

She texted today saying that she was running out of checks (first time ever). I directed her to the vistaprint website and suggested she use her home address and buy enough to make the shipping costs worthwhile. She is on her own to figure it out from there.

[2016BarnardMom]

My D is not good with budgeting and is too far away to be able to help stock her up with groceries, beverages, medications, hygiene items, etc. I had told her that since I used to give her $40 for gas and $30 for her school lunches every pay period, I would now just have that direct deposited into her school checking account. So that's how I have it set up now. She gets $70 every other week direct deposited although $12.50 of that goes into her savings automatically. That is to ensure that she doesn't have a minimum balance on her savings account. She can easily transfer money over if she needs it, but I hope she doesn't need it.

I did send her one box with shampoo, conditioner, razor blades, easy mac, Velveeta Mac n Cheese, etc. and it cost almost $20 to ship it because the shampoo and conditioner were so heavy. I told her that's not happening again. No sense in 100% markup for shipping!

If she were coming home for weekends or I was visiting, I wouldn't give her as much cash, but she would be getting more "things". It's a trade off. She should start working soon so she'll have more money for fun stuff. She has been to a couple Broadway shows and goes out to eat about once a week, but I'm ok with that. She's in NYC after all.

[cromette]

2016BarnardMom,

There are several outfits that do front door delivery of groceries. This one has a flat rate of $9.99 shipping for boxes in value up to $199 in NYC!!!

Netgrocer - Online Groceries and more, delivered straight to your door!

I have used them before in my area to send things to my daughter. My region doesn't have that awesome shipping rate though!!


Also, if you want to ship the items yourself, check the US Postal Service flat rate boxes or REGIONAL boxes if you're sending items within the same region. You can order the boxes online for free, and then the shipping is a lot cheaper sometimes than what you can get actually at the counter in the post office!

[dentmom4]

We cover tuition, r/b and pay that directly to the school out of her 529. Books go on our credit card (she has a card from the account in her name), plus any TRUE emergencies. Other expenses are hers: laundry, entertainment, food, from summer job earnings. She's become somewhat frugal---not doing quite as much laundry as in the beginning.

She watched her brother spend a lot and it's not happening with her.

[megpmom]

Let's see...tuition and books - we pay amount left over after scholarships. Apartment rent and groceries - we transfer a lump sum once a month to her bank account and she pays. Personal expenses, entertainment, Metro tickets, etc - she pays for out of earnings from part-time job.

S2 (high school senior) has a checking account to which we deposit a small amount per month and he pays for all entertainment, gas, and school expenses (dance tickets, yearbook, etc.) We hope that he gets the hang of budgeting before he leaves for college. He is also going to be expected to get some sort of part-time job during school to pay for his personal expenses.