There are a lot of things that parents worry about when sending a child off to college. It is difficult to transition from playing a daily role in your child’s life to parenting from a distance. I was so proud to see my son grow into an independent and capable man, but I was still worried about how well he would do when left to his own devices. One of the things that I was most concerned about was money. Did he have enough and would he be able to manage all of his financial responsibilities? He had to find his own personal money management techniques but TD Bank has some tips that he and any other college student can use when heading off to college.
- Plan Ahead. There are several things that your child can do to financially prepare for college. Working and saving money; earning high grades; participating in school and community activities to increase bursary opportunities; researching the available scholarships and bursaries and applying for as may as possible.
- Prioritize Spending. Put the essential expenses like tuition, rent or residence fees, books and food. If your child is living in residence he/she will have the opportunity to purchase a food plan that can help him or her budget for meals.
- Create a Budget. List all sources of income, like pay cheques, scholarships, family support, student loans – and known expenses, like tuition fees, rent, books and basic living costs. Anything left over can be allocated towards savings goals and discretionary spending.
- Loans and Credit. Educate your child about loans and purchasing on credit. Interest rates, loan terms and credit ratings are not taught in high school and it’s better that they don’t learn the hard way. Using a credit card is a great start to building a healthy credit rating, but the balance should be paid off in full each month to avoid interest charges. These extra costs will eat into an already tight budget.
- Earning while Learning. Many colleges have opportunities to earn by tutoring, note taking or working in various places throughout the school. Learn what the options are and what could be a good fit for your child.
- Stay on top of finances. Have a constant line of sight into what is owed, the interest rate and payment schedule. Have a plan in place to pay off student debt after graduation and increase payments as your income rises. This helps reduce the amount of interest paid, and allows you to start saving earlier for the next big purchase, like a first car or home.
Even though your child has taken those first steps towards independence, he/she still needs some guidance. Check in with them to see how things are going and help them stay on track with their finances. Their futures depend on it!