The Ultimate Off-to-College Finances Checklist

In just a couple of months, many parents will be sending their new college freshmen off to school for the first time. This is a busy time of preparation for new graduates – meeting college roommates, deciding who will buy the refrigerator and microwave, and having fun spending all of that graduation money.

It’s also a stressful time for parents. As you prepare to send off your new grads, you are pulling together loose ends regarding finances. Beyond tuition, you’re probably thinking about bank accounts, cell phone plans, part-time jobs and transportation home for the breaks.

The best strategy is to really think through what your family needs in terms of financing your child’s education and student life. We’ve prepared a simple checklist to guide you through the necessary steps. If you have any questions, please leave a reply, or get in touch with us on Facebook or Twitter!

The Ultimate Off-to-College Finances Checklist

1. Button up your scholarships and loans

If you haven’t already, you should be quickly heading towards finishing any applications or necessary actions to receive the money your child will need to attend school. If you wait, many schools will delay enrollment and housing finalization, so this is really important. Don’t wait until the last minute. Sit down with your child now and figure out whether or not you have all of the money needed to start classes when the semester begins.

Just as a note, many parents and students use private loans to cover what remains after scholarships, grants, and federal loans are applied for and received. If you find yourself needing extra cash, you can use the Student Loan Marketplace to find private student loans.

2. Set aside emergency money now

The best way to do this is to start a separate bank account that is easily accessible, and one that is shared between you and your child. This money can be used for emergency trips home, unexpected class-related fees or any medical-related needs as well. Many banks offer interest-bearing accounts. The key is to make the cash easy enough to access in the event of an emergency, with the caveat being that this isn’t day-to-day money. See further down the checklist for that!

3. Decide if your child will work or not

This is a tough decision for both students and parents, but at some point, your student’s going to need some cash. How will she or he pay for things like groceries, toiletries and the occasional night out (when they’re not studying, that is)? You and your child should come to a mutual decision on this. If your child is not going to be able to work (or if you both decide against it for other reasons), money is going to need to be made available.

4. Set up a college checking account

You should go ahead now and set up a free college checking account (almost every well known bank has them). If your child gets a job, have them set up direct deposit, if possible, so there will always be money ready for them to use to cover incidental expenses. If your child is not planning to work, you can set up an automated transfer from your account to theirs, so that every so often, the bank account is being replenished, rather than putting a huge lump sum in there to use for the semester. This will also prevent the temptation to drain the bank account and head to Rio for the weekend.

5. Plan for college breaks and vacations

Prepare now for the college breaks (typically a midterm break, Thanksgiving break and Christmas break in the first semester). That will keep you from having to scramble to get last minute (and very expensive) plane tickets home, particularly if your child is going to school far away from you. If you think there’s a chance your child would rather do something else on their break than come home, you could just set the money aside and wait until plans are firm.

6. Make a decision about cars and cell phones

Whether a car is essential is debatable, and may not even be feasible depending on where your child is attending school. Consider the expense of parking the car, if the school is in a large city, as well as gas, insurance, and maintenance. This will be another factor when determining if your child is going to work while attending school.

Cell phones are less debatable. If your child doesn’t already have one of their own, consider getting one. They are relatively inexpensive and can be a huge help in emergencies. If you have a cell phone plan where you can add a line for free or for very little money, you could consider that. Another idea is to buy a prepaid phone, and that will help you control costs.

7. Tackle the big white elephant: credit cards

Generally speaking, any person age 18 or over can apply for a major credit card these days. Whether or not they are accepted depends on various things, but you should probably start talking about this with your child now. Here are some questions you can talk about to help you determine what is best.

• Will you be giving them your card to use?
• Will they get their own?
• Who will pay for the charges?
• Do purchases need to be cleared with you first?
• What will happen if bills are not paid or the limit is exceeded?

8. Open the lines of communication

The last thing you need to check off your Off-to-College Finances Checklist is making sure the lines of communication – particularly regarding money – are open. Let your child know that if he or she runs into a problem financially to check with you, and you should already be prepared by following the items in the checklist above. Be sure to keep an eye on shared bank accounts and credit cards, and if you plan on letting your child handle their own finances, teach them how to balance their budget and to ask for help when they need it.

Poll: The Great Credit Card Debate

Are you in favor of letting your child have her or his own credit card? Leave a comment in the box below. We’ll let you know when the results are updated!

Visit the Student Loan Marketplace for more information on private student loans. To keep up with us on the blog, subscribe here. If you have any questions or comments, let us know by leaving a reply below!