@Pizzagirl, people who are smart with money AND can withstand a decline keep it in “just in time” investments. It’s a matter of liability matching and your ability, need, and desire to take risk. If any reduction in the asset would be devastating to your plans, don’t do it. If you absolutely positively need $x within the next y years, and you don’t have the option to dig into other assets to fund a shortfall, put the money in a CD ladder. You don’t invest the rent money or tuition.
D is a sophomore. She started college with close to $1000 of her own (from birthdays, babysitting) money in a checking account. She used that for fun money and she had a credit card of ours for necessities (shampoo, groceries) which she has used very little and never abused. Laundry is free at her school, she does not have a car but does have access to public transportation. We pay for books. She did not run out of money first year or the summer after, which she spent away from home on an internship and was also managing her own expenses. I think she still had about half of the original $1000 and probably didn’t spend more than $25/month on our credit card. Beginning sophomore year she got a job on campus and is slowly taking on more of her own expenses. She understands that paying one’s own bills is part of becoming an adult.
Ixnay, you’re right - and I was actually thinking CD in my head when I read the OP.
There is no law that says parents must give their children a lavish allowance, but many do provide their children with enough money that they don’t have to work and can enjoy themselves.
Under new rules NCAA athletes get as much as $630 per month in spending money. How much they get depends on the school’s listed “Cost of Attendance.” Schools which fudge on this end up not being able to provide their athletes with as much money. Also, I’m pretty sure that poorer students can still get a Pell Grant even in on a full ride. That comes out to more than $500 a month over 10 months. The kids do have to pay all of their own transportation costs out of this, plus cell phone, clothes, etc.
I don’t think it is uncommon for parents who don’t want their child to work to pay all necessary school expenses and then give an allowance of around $400 to $1,000 per month. A lot depends on what ancillary items parents are willing to pay for directly, such as a gas card, clothing, and Spring Break. Based on my own personal experience, I’m inclined to go with the lower amount and then pay directly for the extras.
Many parents clearly don’t want to give their children enough money to take a date out to dinner, attend away football games, go on Spring Break, etc., and that’s a perfectly acceptable decision. I also think the cost of the college should play a role. I’ve told my children that if they get a full-tuition or full-ride scholarship I intend to be far more generous in terms of spending money and car.
I just think people reading this thread ought to be aware that a lot of students are getting more than $40 a month that some seem to think sufficient. If many Pell-eligible athletes get a monthly allowance of more than $1,000 a month to cover all of their non-education expenses, then it is not unreasonable for more affluent students to get an allowance that will allow for a similar standard of living, provided parents can afford it.
$250 per month and we will pay her Uber charges. Goes to school in a city and these funds are used for a dinner or brunch out, movies or ordering in with friends.
For a school to give an athletic stipends of $650/month, that would be a COA of about $7800 over room and board,and not including books as ncaa allows those to be included in the scholarship. Most of the stipends I’ve seen are in the $3000 to $4000 per year range, so in the $250 to $350 per month range. If the student also qualifies for pell grants, that is extra money but the student would also have a need for that, right, just as any student who qualifies for pell would have? Those students are also going to have a hefty tax bill so will need some of that overage to pay taxes.
There really aren’t that many athletes who are on full scholarship and receive the full stipend. Those students also cannot work to earn any spending money, usually including summers. Full scholaships athletes are training year round.
I don’t think most families base the allowance on what the student needs or wants to spend per month, but on what the family can afford. Most of us can’t afford to put $25000 into a bank account on day one of freshman year and tell the student to manage it wisely. Most of us can’t afford $250 per month on top of tuition, room and board, travel, insurance.
Our freshman daughter is on her own for spending money. We haven’t given her an allowance since she got her first job, right after she turned 16. While in high school, she had to pay her own car insurance, but we cover that while she’s in college (which is annoying since she can’t drive at school anyway. Boo.)
She had work study as part of her financial aid package but elected to not get a job 1st semester. She’s having to streeeetch her summer earnings because she knows we’re not sending additional money. She’s doing great so far. We also know she wants a new cell phone, but we’ve flat out told her she can get a new phone when she can pay for it (which is clearly not going to happen without a job).
We found that for our older kids, their on campus jobs added so much to their college experience. They earned their own money and got interesting skills.
@3rdXsTheCharm, check with your insurer; we got a substantial discount because DS school is more than 100 miles from home.
Our daughter was expected to earn her own money for books and incidentals with a campus job - 4-6 hours a week was enough for her needs (no car and we paid car insurance, trips home etc.) It made her a better shopper for her books, and I think the work experience helped her get her first full time job! Campus jobs were tough since she didn’t get work/study but between lifeguarding and research assistant gigs she found work. We did “stock” her ID/debit card with a couple hundred dollars beginning of freshman year, and gave her a lump sum spending money during her semester in Spain when she couldn’t earn her own money. But $100 a week, or $200 a month allowance sounds crazy to me. Didn’t dream other parents were doing that!
Our freshman D in L.A. has our credit card that she can use for school and living expenses (books, shampoo, etc…) but not social expenses. We give her $150 per month for an allowance, which she uses to eat out and other social expenses. She has about $1,000 in savings from the summer, but other than a couple of Disneyland trips has not touched it. $150 a month in L.A. does not go real far, so she also got a lifeguarding job for 8-10 hours a week, which gives her another $300-400 a month. She seems to be doing pretty well managing her money and does not beg for extra except for occasionally lobbying for certain expenses to go on the credit card.
We didn’t give allowance. he saved some money in HS by doing paid summer intern and forgoing the SAT prep class. Still got 2400 in first try. His account didn’t drop much after 4 years in college.
“I don’t think it is uncommon for parents who don’t want their child to work to pay all necessary school expenses and then give an allowance of around $400 to $1,000 per month. A lot depends on what ancillary items parents are willing to pay for directly, such as a gas card, clothing, and Spring Break. Based on my own personal experience, I’m inclined to go with the lower amount and then pay directly for the extras.”
$400 - $1,000 sounds pretty high to me, but really, what do I know. We did $200 / month and my kids still squirreled lots of it away. They ate their meal plans, and then went out occasionally to modest pizza places, diners, Chinese food, etc. - nothing particularly fancy. I think it hit son harder as he paid for his girlfriend, but them’s the breaks.
Yep, when my son got a g/f, he certainly spent more $$$$. I never ask who,pays for flights to,visit her parents, or for their get-together. I also never ask about their gifts to,each other.
DS helps pay for college out of summer earnings and work study. Each year, allowed him to keep 1/2 of his work study for his own expenses on top of his summer earnings. This year we made a huge exception and paid for all of his college so he could use his work study on medical school applications. Even then we had to help out and he had to get a credit card to cover travel expenses. He is a very frugal guy, and his long-term girlfriend just puts up with it.
Seems like the term “allowance” is kind of semantic. Our plan to provide $25 per week has turned out to be adequate. As far as we know, since we don’t monitor whether or not or how she spends this money, she is not spending all of it each week. We have paid for books, private music lessons, and all travel expenses.
We pay their cell phone bill as part of a family plan, and transportation since we drive them to college and pick them up. That’s pretty much it. They both pay for incidentals from their work study jobs.
At my school (liberal arts, with roughly 60-65% of people on at least some aid), I’d say it’s about 50/50. Most of the full-pay students get allowances (it’s kind of hard to get work-study if you’re not on financial aid, I think), some with ridiculous amounts I’ve never even had in my bank account, others more normal amounts of $100-400/month. For the students on aid, it varies. Some get the $100-400, some less, and a good portion get nothing at all, since it’s relatively easy for anyone on aid to get enough work-study hours. I don’t get any money from my parents (frankly I’d feel bad accepting it anyway), but so far doing work-study for 12hrs/wk has worked out fine for me. It’s enough to pay for phone bills, guitar lessons, and any other personal expenses.
Thanks, IxnayBob, but our daughter goes to school only about 50 miles from home. We got the discount for our older kids who went further, but no such luck with #3.
I pay everything including tuition, room and board, and all other expenses (I give her a credit card). On top of that, I give her $200 a month for fun expenses like movie, eating out.
No monthly allowance. After contributing a pre-arranged amount to the college fund from his summer earnings, son has to make his discretionary share stretch for the school year. I also give him a slug of money (this year $750 per semester) at the beginning of each semester for books and travel home. If he’s frugal with those expenses (used or rented books, discount tickets, etc.), he gets to keep the extra. Anything beyond that and he has to find a way to get more hours out of his campus job.
He also gets lots of care packages, as well as cards from grandparents that I’m certain include extra $$$.