Freshmen budgets/spending money? - Page 3

MommaJ · 11-01-2009, 04:43 PM

Turning to the practicalities of this issue, D and I just went through her debit card statement line by line to figure which October expenses I'll reimburse her for. Our understanding is that she uses her own funds (from her summer job and current babysitting gigs) for non-essentials, and we pick up the rest. But the process wasn't that easy. I had no idea whether a CVS expenditure was only for prescriptions and needed toiletries or included other items, and she couldn't remember and hadn't saved any receipts (lesson learned there). Even if she had the receipts, how tedious to go through each one! When it came to fueling her Metro card (she's in DC), some of her trips were personal, some were for events she was required to attend for classes (a play, a dance recital, a museum exhibition), and she used her card when we were going around town during family weekend. I finally decided to pick up half of her Metro costs because it was impossible to keep track (especially since Metro trips, unlike NYC subway rides, are charged by the distance traveled). Then there were food expenses to dissect. She's expected to maximize her use of the meal plan, but sometimes her schedule requires her to eat elsewhere, plus I encourage her to keep fruit and milk in her mini-fridge. But then there are time she's eaten elsewhere just for fun, which is considered her own entertainment expense. In addition to parsing the debit card statement, we have to review the statement from her college "bucks" program, which she has to use for laundry (reimbursable) but also uses for snacks/coffee (not). I thought I had set up a simple plan, but wow, not so much. All in all, however, this has been great experience for her. She is quite astonished at how fast the expenses add up and has a new appreciation for every dollar and renewed incentive to find more sources of income. We may switch to an allowance-based system next year, when we'll have a better handle on her expenditures; we didn't have a clue how things would go freshman year, so didn't even attempt to come up with a number that would cover everything. I can certainly understand the temptation to just hand over a credit card and hope your kid doesn't go wild.

Modadunn · 11-01-2009, 05:07 PM

Quote:

I can certainly understand the temptation to just hand over a credit card and hope your kid doesn't go wild.

Hope is a relative term. I hope to not go broke as well.

Yalemom2 · 11-01-2009, 05:08 PM

Our S has a card in his name which is paid in full automatically out of his checking account every month and one in our name which we pay. He uses the one in our name only for expenses we have agreed in advance to pay for. This works out really well for us.

sabaray · 11-01-2009, 05:18 PM

I love that, Modadunn! Hoping not to go broke is a familiar feeling in our family as well. MommaJ, you have far more patience than I do. Although it's very good training for any future expense reports your D may have to submit !

momreads · 11-01-2009, 05:22 PM

My son had money in his account to start the year, and he has been fairly wise in spending it. But once a month, I have him check his balances with his college accounts -- just to make sure he's okay, as he uses this money for laundry, books and supplies and assorted local eating places. So far, in nearly three months, he's asked for a total of $100. He'd like to get a part-time job, perhaps tutoring next semester.

kantianethicist · 11-01-2009, 05:29 PM

^^^
WOW MommaJ--that's a lesson in balancing a budget!! You should work for the government--you'd make them accountable for our tax dollars!!

Your post is an example of how kids sometimes don't know what they're buying or how much things can cost. Until my D got a job and started paying for things herself, she, too, had no idea how expensive trivial things were.

It's just good practice for adulthood to be practical about some purchases. I didn't give my D a credit card. She got a secured one on her own. When she lived at home, she was given everything she needed, wanted and then some. When she left for school, I told her it was (more or less) independence time--time to grow up. Certainly not overnight, but step by step. She's surprisingly happy to be taking responsibility for herself now.

Some schools offer seminars to students regarding financial matters and fiscal responsibility, but I think it's a parent's job to teach them those things. It's an important skill set--why leave it to chance?

3bysmom · 11-01-2009, 06:03 PM

So this is what I have learned from all of you (and I think what we will do)...

1. He already has a local checking account so that he can deposit his paycheck.
2. When he comes home for T'giving, we will go over the first cc statements to determine (ala mommajay) what he is spending.
3. Together we will agree on an amount that we are willing to contribute.
4. I think we will take back that tempting credit card for now. You are right - if there is an emergency we can always charge something for him over the phone (plane tix, emergency room, etc).
5. Help him to create a budget that he will follow and then...
6. Step back and watch.

Had our first lesson in saying no last night - called to ask if he could go to visit his gf @ Brown next weekend (actually asking if he could charge a $200 train ticket) we said we hoped he had a nice time but it would be on his own dime. I do feel bad - it's not entirely his fault, we have never given him clear and consistent messages regarding money. So we begin the process - better late than never, right?

meezermom2 · 11-01-2009, 06:47 PM

I think the period of the time that the money should cover is important too. Perhaps in the beginning depending on the student's spending habits money should be given once or twice a month. Overtime as the student, hopefully, learns to manage money it should be given once a semester or once a year.

calgirl77 · 11-01-2009, 07:51 PM

Regarding the OPs post about an amount that is reasonable, I think it very much depends on where the school is located and what the living situation of the student is. Obviously, cost of living in say, Berkeley, is going to far outstrip more rural locations like Fresno. This is true for even the most basic items, like groceries, and also true for entertainment options (concerts, movies, etc). The living situation of the student is also important to consider. If they are in a dorm, depending on their specific dining hall hours/class schedule, it may not be practical for students to rely solely on the dining hall. If students are in an apartment, they can be expected to cook for themselves most of the time.

One other note on credit cards - I think it is vital that students have one that is monitored by their parents for two reasons. First, learning the value/perils of credit cards early on can reduce temptation later and secondly, if students don't have access to such a card, they are more likely to sign up for one of the many available to them by unscrupulous vendors. The problem with this, of course, is that parents may not even know about these cards until the damage has been done.

thumper1 · 11-01-2009, 07:56 PM

Where is Violadad who can link all the previous threads on this topic!!??

The parents in this family did not cover any discretionary spending at all....and that included textbooks. Our kids had summer jobs, baby sat, and worked a few hours during the school year to earn any spending money. It was THEIR money. Folks have asked me how much my kids needed for spending money. The truth is...I have no idea. I didn't earn their spending money so I didn't monitor the amount or what they spent it on. Our kids were much more careful spending THEIR money than they were when we gave them OUR money. And is good for them to know what their own earning power could purchase. The reality was we covered room/board/tuition/fees/transport home/cell phones. They covered anything else...dinners out, the occasional burrito or pizza, concerts, spring break trips, clothing, etc. We did give them gift cards for holidays and birthdays...but not a regular allowance.

This, however, is a personal family decision.

mom2collegekids · 11-01-2009, 08:14 PM

I don't agree with the idea that a kid shouldn't get a part-time job for personal/fun expenses because he "might" be taking a job from a kid who needs the money for tuition.

If that is the "right" and "just" attitude, then there are probably a lot of wives that shouldn't work because their own husbands earn enough (or vice versa), and those wives might be taking jobs from other men or women who need the money to support their families.

Who's making that claim? Who's going to go around and telling high earner couples that one of them should quit so an unemployed person can have their job (and in this economy, there are many families that don't have any wage earners. Those people REALLy need those family-earner jobs.) Certainly, having the ability to pay one's rent or feed one's kids is more important than going to school, but no one's making that suggestion.

Besides, unless a kid is a "trust fund baby," he's going to have to learn the value of work, how to manage money, and make responsible choices involving "fun" expenses. There's no better lesson than a part-time job.

The Mom · 11-01-2009, 08:32 PM

Exactly Thumper! You said it so much better than I. How else can these young adults learn to control spending habits and maybe, just maybe save some $$ for later if it is mom and dad's $$?

oldfort · 11-01-2009, 08:35 PM

MommaJ - it really doesn't need to be that complicated. It is an over kill to through receipts, because after all do you not have a general ideal how much things cost (shampoo, soap, drugs from CVS)? Even with metro card, what's the % use is personal vs school related. And does it really matter? It's not like you are paying for cab rides for her to go partying in the city. I don't think it is productive to be nickel and diming one's own kid. I would just figure out approximately what those extra costs would be, say $150 or $300/mon, and give her the same amount every month. Leave it to her to manage it.

My daughter studying abroad in Sydney. I just give a set amount a month plus paying for half of all trips. I don't care if she is buying the most expensive shampoo or spending it all on cabs or drinks. I am not going to ask her to show me every receipt because I would trust what she tells me even if I need to question the spend.

Modadunn · 11-01-2009, 08:42 PM

While s had a summer job and made some good change, and we really did allow him to spend that as he wanted, I still tried to monitor HOW he spent his money at least while he was in HS. Heard too many horror stories of what kids spent their money on that I felt it was worth keeping an eye on it. If he spent $50 and was out with his girlfriend, that makes sense. It wouldn't make much sense if he spent $50 but did "nothing."

thumper1 · 11-01-2009, 08:45 PM

I think the key here is to set an amount and stick with it. For some, there is an allowance given for expenses. For others, the kids earn the money.

I guess MY bottom line is that I want my kids to live within whatever means they have (whether provided by me or earned by them). Luckily my kids have never asked for extra money. That is a good thing! As Oldfort said...she gives an amount...it's up to the kiddo to budget it wisely...and (I would guess) not ask for more unless it's REALLY needed.