Freshmen budgets/spending money?

[Yalemom2]

Actually kids DO need to establish credit. That can be done by having a cell phone in their own name or some other bill, but usually it requires that a parent cosign. It can also be done by obtaining a credit card in kid's name. (Allowing your child to have a card on an account in your name has an on again off again history as far as establishing credit goes, and it has never been a strong contender as a method.) I think that having the child get their own credit card with a low limit and making sure he/she understands:
1. exactly how finance charges are calculated,
2. that by not paying the full amount you are in essence taking out a loan at a rate formerly charged by loan sharks,
3. establishing good credit will allow him/her to ultimately procure loans for a house/car with good interest rates,

is by far the best way to go.

[Yalemom2]

Also, be aware that as of early next year, college students without substantial income will no longer be able to get credit cards unless a parent cosigns.

[oldfort]

A kid needs credit to get loans for a house/car...No kid will be buying a house right after college. If they are lucky maybe 3 or 5 years later, that is if they have a job. During that 3 to 5 year period, they could easily start any credit history.

We can teach how finance charges work to our kids without them having credit cards.

To me, it is more of a mind set. I am currently supporting D1, it includes most of her spending money. If I "allowed" her to get a credit card, it would be no different than my own credit card (she would be using my money to pay for her credit card). I would rather for her to establish her own credit with her own money.

[ellemenope]

My father used to be a rabid anti-credit card person until he found that he couldn't rent a car one day. Having a credit card can make life easier in some situations.

So we made sure both of our kids went off to college with credit cards in their own names. They use the credit card a couple times a month for little things (no tattoos, thankfully ) and pay the card completely off at the end of the month. I think that teaches them good habits.

[Yalemom2]

oldfort - you need a credit history to rent an apartment, too.

[Yalemom2]

I think you do, anyway! I know when my sister got divorced at the age of 55, she couldn't even get a phone in her name without having someone cosign - I guess the utility bills had not been in her name and she hadn't been primary on the credit cards, so I'm a little fanatical on the subject. I actually made sure my younger S (a sophomore) got a card in his own name before they force parents to cosign.

[ParentOfIvyHope]

DD has stayed for 9 weeks and her expenditures have been as follows:
Food: $500
Winter shopping (CC): $500
Stationaries/Books etc: $200
Weekend Fun: $360

She seems to be paying in full ontime for CC.

She has recieved $425 for her research intership for 5 weeks.

Is this on the higher or lower side?

I asked her to open a Credit Card before leaving in August and she qualified on her own, which means she had a good credit history to begin with. This should help her strengthen credit more if she uses it properly which seems to be the case untill now.

We setup the following accounts for her with funding:
Checking: $1000 She uses with a debit card
Saving: $4000 (She saved during her high school internships, awards, jobs etc)

But I've been depositing money to her Checking whenever it goes below $1000, so that she has emergency money in the saving.

[TwistedxKiss]

What are some alternative ways to build credit besides with a credit card? My mom mentioned transferring money into my account every month so that I could write the checks for my loan interest payments, but at best that would only be happening for two years and it would quite possibly only be one year (not sure we can afford to defer interest on my loan for next year), so I am guessing that's not going to be enough by itself to help me have sufficient credit within the next few years. Are there any stores that do store charges besides department stores, etc? I only go clothes shopping once a year or less so those aren't that useful. And if there are other options I don't know what they are.

[ParentOfIvyHope]

TwistedxKiss: Best way is to have a Credit Card even if it is secured that means you get it against a bank deposit. The way I think DD was able to build her credit history and qualified for a Credit card on her own was a saving accound that I opened with her 6 years back but that takes long time to build history but it does too.

[ParentOfIvyHope]

I would have felt like a complete jerk taking a part-time job when I was a student to pay for my fun little incidentals, knowing that any job I would have taken, whether on or off campus, was taking away from someone who NEEDED that job in order to pay tuition. I could not in good faith advise my own to-be-full-pay students to find a job on campus knowing that other kids depended on those jobs. And if there are nearby off-campus jobs (retail, fast-food, etc.) -- again, same thing applies. What a jerk I'd be to tell my full-pay kids go take the nearby Panera Bread job for your fun money when some other kid really needs that money to stay on campus. It would go against my values -- I'd rather give my kids the fun money, knowing that they've "earned" it by their good grades and good performance, and let the opportunity for paying jobs go to kids who really need them.

Well said Pizzagirl. It seems like the right thing to do but I don't think DD Research internship should be considered same as the purpose for her is to gain experience and not the money.

[owlice]

No kid will be buying a house right after college.

It does happen, but surely can't if the kid doesn't have any credit.

[ParentOfIvyHope]

Oldfort:

A job is not a charity. You don't give a job to someone because he/she needs a job, that's how it is in the real world. My daughter applied for a job on campus that wasn't designated for work study. She was hired because she was the best candidate. They've had many workers in and out of that office for the last 3 years, but they love D1. They are holding the job open while she is studying abroad this semester. She will go back this Spring and next year as a senior. They said she has done more in the office (organize their database, website, budget) than other students. D1 also teaches ballet, which I don't think that many people could do.

All jobs are not same and doesn't need skills. I think those are the jobs Pizzagirl was referring to. You don't want to take a job at Fast food center to gain any meaningfull work experience. That is why I mentioned that the research internship should not be considered as snatching away from a needy person as it requires skills and you need to prove yourself to get it in the first place.
But jobs that anyone can do and doesn't require skill should be left for those who need it to pay tuition and not to get money to spend on Red Lobster dinner.

[owlice]

For someone who hasn't had a job before, ANY job, skilled or unskilled, provides meaningful work experience.

[mom2collegekids]

>>>
But jobs that anyone can do and doesn't require skill should be left for those who need it to pay tuition and not to get money to spend on Red Lobster dinner.
<<<

If this logic holds, then all the moms who work some full-time or part-time job to pay for "extras" or "nicer homes & cars" should quit so that families who are unemployed can take those jobs to feed, clothe, and house their families.

[ParentOfIvyHope]

mom2collegekids:

If this logic holds, then all the moms who work some full-time or part-time job to pay for "extras" or "nicer homes & cars" should quit so that families who are unemployed can take those jobs to feed, clothe, and house their families.

That is why IRS adds the mom's earning to Dad's earnings and take 50% out to discourage such practices unless people do undocumented jobs.