<p>I’m looking for opinions regarding how to best manage my S’s monthly allowance when he heads off to the big State U. Are debit cards loaded at the start of each month a better option vs. a credit card with a low limit? My S has earned several scholarships, so he won’t need to pay tuition or housing each semester. His monthly allowance would go towards food, gas, sundry, etc. He is a thrifty kid (still has not spent his Christmas money) so I’m not worried about him going on a spending spree. </p>
<p>depends on the son how you work it, but I’d consider a monthly deposit. I have tons of stories of freshman boys running through the allowance by the end of the fall. Food plan set-up is sometimes the issue, or the college lifestyle at the particular school.</p>
<p>Our S has a student checking account (with debit card) thorugh our bank. We can access his account on the internet at any time. At the beginning of each month we just get online and transfer a set $ amt. from our account to his.</p>
<p>For the things <em>we</em> pay for (food and housing), we deposit into DS’s account at the bank here and he just uses the money there to pay the bills. For things that he is responsible for (books, entertainment, travel, restaurants, etc), he manages that himself…so I guess he deposits the money from his summer job and such into the accounts.</p>
<p>I think it depends a lot on location. Dorm or apartment and in which city. My son is NOT thrifty and will buy someone food if they don’t have it.</p>
<p>My kids have both done o.k. on their own with summer earnings and part-time/work-study during the school year. My son’s pretty frugal and so it was no surprise that he was o.k. I expected my daughter to have a tougher time because she likes to spend – but she’s done pretty well so far this year - and that’s living in New York. I paid housing costs directly to the school – and basically I told my kids that I’d take care of the bill the college sends me if they would manage their own expenses. Of course I gave my daughter a little extra cash when she was home for the holidays - but she’s got two part-time jobs on campus so she gets by.</p>
<p>Re: credit card limits. It depends on the type of account your student has. Our kids have B of A accounts that include debit and credit cards (separate), savings, checking and free online banking. Their credit card limits are NOT raised automatically as long as they are college students.</p>
<p>Keep in mind that for most kids, costs at the beginning of the semester/quarter (primarily books) are likely to be higher than other times. So “equal” amounts each month may not work.</p>
<p>If your child is truly thrifty, then putting in an amount at the beginning of each semester, rather than each month, will teach them how to budget.</p>
<p>Then again…some of our kids don’t get any money, and have had to budget because it is their own earnings they are spending…but that topic has been debated on many previous threads.</p>
<p>We have an arrangement that seems pretty similar to others. S has a checking account with a debit card. Also a credit card for emergencies, although the bill comes to my address. During the school year, he gets $75/month allowance that is automatically deposited into his account. We pay directly for tuition and room and board. He has summer earnings which he uses for anything the $75 doesn’t cover. We reimburse him for the cost of books.</p>
<p>Son is a freshman in LA, also on a scholarship, has his car there, so we deposit $200.00 per month automatically to cover gas, food, entertainment etc. His summer earnings are deposited in the same debit acct, and he is pretty frugal as well, so it has worked for us so far.</p>
<p>We’ve given our D an allowance of $75 / month to cover laundry, personal items, and a small amount of entertainment. We give her a check for the semester at the beginning of each semester. She’s never had a problem running out of money, as she also has some $ from summer jobs, work at college, etc.</p>
<p>When you say “She’s never had a problem running out of money” do mean that she manages her money well and never runs out or that she is more like my D who never has a problem managing to run out of money? ;~)</p>
<p>Another thing we did for S2 who is still in hs. is to have his debit card connected to our credit card account for emergencies. This way he doesn’t have to keep up with a credit card (don’t even know if you can get one under 18) but knows if something happens he can use his debit card and what his acct. won’t cover will just roll over to ours. He knows this is an emergency plan and wouldn’t use it otherwise. He’s not a big spender.</p>
<p>S1, college soph. has a credit card which has come in very handy for unexpected expenses. The bill comes to our house but he can view his balance online and is responsible for making sure it is paid off.</p>
<p>My D has a debit card. This avoids all sorts of issues like limits being raised and going into debt. We start her out each semester with a few hundred dollars. Books, fees, and supplies take most of that. She does about 3 hours/week of workstudy which covers entertainment and miscellaneous expenses. We do get a money call about once a semester for some exceptional expense. This semester we transferred money to cover the athletic center fees. I expect we will get another request before Spring break.</p>
<p>I always recommend looking at the official COA for a college. That is the maximum amount that the government will lend for a PLUS loan and back in financial aid. That gives you a good starting point as to what the college feels is a reasonable amount that a student has to spend during the year. It is supposed to represent the average amount spent is what I am told. The amount should be adjusted for any special circumstances your kid has. Clearly if he is taking a course that is much more book heavy than the average, the book allowance is not going to cut it. If he is in a major that is light on books, he won’t need that amount. The same with the spending. If the kid has a car, he is going to need more money for gas,maintenance, emergenicies, etc. If he is in a major that requires performances in clothes that require dry cleaning or going to outside events, the allowance needs to be adjusted upwards. But it gives you a starting point.</p>
<p>I gave my kids COA allowance with a lump sum of about a third of the COA allowance available in credit in case of an emergency when that amount might be needed right away. Never happened with mine, but friends of mine have had kids break eyeglasses at a bad time when needed and having that money allowed immediate replacement, and other situations where that reserve was really helpful. Things always tend to happen when you are not easily available, I have found. My nephew needed his credit card to use as a security deposit for use of a musical instrument when his broke at an inopportune time. The cost of the short term rental was low,but they would not give it without the reserve of a card.</p>
<p>If your S is responsible, a credit card might be a good thing. Will build credit history. My son’s credit score after a about 1.5 year is better than 60% of people.</p>