<p>Our D has her first job, so this is her first experience managing her money. We never paid allowance, and money received for gifts was saved in the bank. She's not great at it in the first 3 months she's been getting a paycheck. Hasn't overdrawn, but sure hasn't saved much either, doesn't keep close track of deposits and expenditures, and is spending too much on little things like coffee drinks, lunches with friends, etc. Is your student good with money? How do you help them learn about budgets, etc? How do you teach them not to give in to "it's burning a hole in my pocket" type of spending? She sees us working hard to afford the things we have, and being very careful with money because we don't make a lot, don't have a big house, don't take vacations, etc. So partly I think it is her relief at finally having some cash that is making her want to enjoy it. I want her to learn to save while most of her expenses are taken care of by us - how should I help her? We need her to save, so that she will have the money she needs to help during study abroad, or an internship period, special events, etc. that we might not be able to help her with. I would welcome advice!</p>
<p>One way that might be effective is to offer to match her savings and put it in a special account earmarked for special extras in college, including possible internship, study abroad and/or special events. Explain to her that this is very important for her if she hopes to be able to participate and suggest a %–perhaps 33-50% be placed there, to be matched by you and which can only be withdrawn for one of the agreed upon purposes that you both agree upon. If you could afford it & want to sweeten it more, you can offer to match her savings $2 from you for every $1 from her for this 1st job.</p>
<p>If she has not managed money before now, you may need to prepare yourself for a painful experience. </p>
<p>You mention that most of her expenses are ‘taken care of’ by you…perhaps its time she learn to take care of them herself.</p>
<p>Have you sat down with her and helped her work out a budget? This is not instinctual…it must be taught. Demonstrate with your own budget how much you have to set aside for expenses, and then help her develop categories of her own that include the ‘fun’ things, but include forced saving for money she will need to cover her college expenses.</p>
<p>Depending on what you are paying on her behalf (you mention you cover most of her expenses), STOP covering anything but the essentials. </p>
<p>We told our daughter early on that once she hit college, we would pay her tuition, room and board but EVERY other college expense was on her. Books, supplies, spending money, etc…she had to take out of her savings. We discuss what is essential and what isn’t. Before she left for her freshman year, she sat down and set up a spreadsheet budget with my husband that laid out what she expected each expense to be, and set a strict weekly ‘fun money’ budget. She updated regularly and sent us progress reports, and they reviewed the budget when she was home at the holidays to adjust.</p>
<p>I taught her how to keep track of her money via on-line banking, and through my own bill-paying showed her how I file receipts to check against statements and make sure there are no mistakes. Just seeing a parent do it isn’t enough…you have to actually show and teach them how to do it.</p>
<p>She’ll learn to save when she feels the pain of not having money. I still remember my daughter being upset with me early in HS when she wanted to go out with her friends to dinner or the movies and I wouldn’t give her the money to do so. She complained that her other friend’s mother was always making sure she had $20 to do the fun things; I told her she needed to use her own money for that stuff…that I would only pay for the essentials like clothing. Food I pay for is consumed in the house, not at a restaurant.</p>
<p>Today, that friend is miserable because her parents can no longer afford to just give her money to go out, and she’s mad that they don’t. She’s not motivated to get a job because her parents made it too easy for her to just get money from them. My daughter? She has learned what it takes to have free-spending money while still paying her expenses, and now thanks me for not giving in to her asking for cash when she was younger. She never expects her father or I to pay for anything (she’s 19) and is genuinely appreciative if we tell her to put her money away and we will pay.</p>
<p>I love HImom’s idea (wish I had thought of that years ago, but can suggest to others.)</p>
<p>When the worm was in HS, within year before college, we addressed the allowance issue. I asked him to write down all his expenses. I told him it was low, as didn’t include more than one outing a week with friends, gifts to friends and a few other things. I upped it by $50. While this plan had no savings component, it was a start to thinking about where money went. </p>
<p>While I know some young men who spend a lot on clothes and appearance, I see far more young women who spend and are not aware how their small impluse puchases add up. Keeping a list can really help.</p>
<p>It will help kids to learn how to budget if they are EXPECTED to pay for their own necessities. When my son started driving we told him he had to pay for the gas. If he ran out of money then his car would park in front of house and I would take him to school. He did not like that and it was my son’s first lesson to save to buy gas. Whe he wanted a smart phone we expected him to pay for the data plan fees. As a result he had to work more and save more. Before his graduation I told my S the same thing what msmayor did that we would pay for his education and room and board but he had to come out with his own spending money. That motivated him to work two jobs this summer. All the cash gifts he received for graduation will help to pay for his laptop, bedding stuff, books, etc.
Definitely have your D open an online banking so she can monitor where her money went. My S has bank of America campus edge account that links to my saving/checking. I can transfer money back and forth and also see his spending while he does not have access to mine.</p>
<p>Be very very careful if your child is ADD, has executive function issues, poor impulse control, etc. While my son was living at home, he had an “emergency” credit card that he didn’t use. It just didn’t occur to him. While away at college it dawned on him that he could go get fast food every night if he wanted. He’s is therapy, but the therapist has warned that he may never be able to be trusted with a credit card or even a debit card. At 20, we are his “bankers.” He works and we dole out a bit of cash and save the rest for him. The therapist warned that later in life, his (eventual) wife may have to do the same.</p>
<p>As all this was coming to light, I saw a story in the paper saying that reserch has shown that those with ADD are more likely to file bankruptcy as adults. Ya think?</p>
<p>Our 18yo S was OK with his expenditures til he got a car. I wasn’t happy with his dependency on his debit card before the car, a coffee here, McD’s there, snack after school at the local supermarket, etc. It was all small stuff, and at the end of the week it didn’t add up to too much but when you buy little stuff with a debit or credit card it has the possibility of becoming a big surprise down the line. Now that he has a car, those little expenditures are happening once or twice a day, difficult to keep track of and he is spending, way too much on non essentials, imo. It is all his earned money, but I still want him to understand that he needs a budget and needs to work within it. So we have talked about him using his debit card only for gas and emergencies, and pulling cash once a week from his account for the non essentials. Once that money is gone, he has to do without the coffee, the burger at lunch, etc. I am not sure how that is going because he is never home 
but I plan on sitting down with him again next week to review. I am a joint account holder on his account and may have to play hardball with him for a couple of weeks but he needs to control those little expenditures. </p>
<p>His graduation money is being invested. He has been researching various stocks, bonds and mutual funds and will sit down with H in a few weeks and discuss strategy for that money.</p>
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<p>I disagree. Our deal was that the KIDS would earn their own money for special extras in college, discretionary spending and books. They both earned enough money in the summers and on vacations to pay for these expenses. We were VERY clear that we would not supplement their money for these expenses. They knew we were serious.</p>
<p>I would be very clear to this student that she will be receiving whatever from you (if you decide to include some discretionary funds, that is YOUR family decision) when she goes to college. Make it clear that if she overspends, that will be HER problem, not yours. She can always just eat in the dining hall and go to free things on campus if she runs out of money.</p>
<p>My kids were VERY good about managing money they earned. We didn’t give them the chance to manage OUR money!!</p>
<p>My daughter is good with money, as long as she has plenty of it!</p>
<p>I agree with thumper, support your child as much as you see fit but make it non negotiable. I find it hard to believe that an 18 year old who is capable of attending college is incapable of working out a simple budget without being micro managed. Presumably the only expenses are rent/car/food/phone/entertainment. Assuming rent is paid at the beginning of the semester and food can be incredibly cheap if it has to be there’s nothing that can go too badly wrong.</p>
<p>The OPs daughter is a rising college freshman. Presumably she is living in the dorms with a meal plan…tuition/room/board and fees will be “billable costs” coming directly from the university.</p>
<p>If the parents want to give this student money for discretionary spending, that is their family decision. BUT in my opinion, this should NOT be a bottomless pit of money. </p>
<p>For example…I LOVE my daughter but she was spending $155 to get her hair done every 8 weeks or so. Because SHE was earning the money working, and she was NOT asking me for funds, I had no problem with this. She also covered her other discretionary costs including all of her books and vacation travel and the like. </p>
<p>HOWEVER, if I had been paying a NICKELY towards her “beauty things”, she would have been politely told that I was NOT funding the overpriced “spa”…at all.</p>
<p>If you don’t set a limit, you could very easily get into the position of “renegotiating” this discretionary spending based on OVER spending by your college kids.</p>
<p>Oh…we did tell our kids…if we were contributing to discretionary spending, we needed to see ALL of their bills…that included credit cards and receipts. They thought twice about that and decided to manage their money themselves. You know…it’s something they needed to do ANYWAY. The worse that could have happened is that they would have run out of discretionary money (both of our kids had friends who did…and their parents did NOT bail them out)…and they would have had to eat in the dining hall all the time and go to the free activities offered on their college campuses. They weren’t going to starve and they weren’t going to be without a roof over their heads…we were paying room/board for them.</p>
<p>Thank you all for responding. At this point, because D just started working in April and the hours are iffy because she gets “called out” if it rains, her income has been minimal. She has a savings account with a debit card because her pay can only be direct deposit - no paychecks issued. This is a small credit union without online banking. I taught her to keep a checkbook register to track deposits and expenditures, but she hasn’t kept to it faithfully. There is no overdraft allowed on her debit card, which is the nice thing…if there’s no money, it gets denied, and she hasn’t done that yet. We pay for her food, most clothes, things like shampoo, etc, and car insurance for her to drive due to work. Once she goes to college, she won’t have a car, will have a work study job, and it will be enough for us to be paying the monthly tuition bill - we will not be able to give her spending/saving money - that’s what the work study job is for. Right now, her cell phone is paid by us because it’s part of the “family plan” and just $10. I suppose we could have her pay that now. I guess I just wonder how much is reasonable to expect her to save vs. spend. She has made about 600.00 and has only saved about 20% of that. She isn’t ADD or anything - just a 17 year old who is enjoying this time with friends but using her money too much on social outings…</p>
<p>"As all this was coming to light, I saw a story in the paper saying that reserch has shown that those with ADD are more likely to file bankruptcy as adults. Ya think? "</p>
<p>That bothers me, especially given how broadly ADD and other potentially “spectrum” disorders are being defined. Would this mean research supports limiting/tailoring credit for those with AD?</p>
<p>My own ADHD/HI son is GREAT with budgeting his OWN money (puts it in savings with no access): not so much with mine.</p>
<p>Here is my opinion…the amount she saves will be the amount she has to spend. If she chooses to spend her earnings all summer and has little in savings…she will be caught very short especially before her first work study check comes in. If you are not planning to supplement her discretionary spending, she might be wiser to bank the vast bulk of that and spend less this summer. That will give her some spending money once she gets to college. If she has saved 20% of $600, she has only saved $120. If that’s all she wants for spending money…so be it. Let it be her decision.</p>
<p>When I was a student, I kept track of ALL my expenditures on file cards. The act of writing it down made me pause and reflect as to whether I REALLY wanted/needed the item enough to get the file card & record it. I also started having some loose budget categories. It helped me see how and where I was spending my money.</p>
<p>I was always a good saver and have always enjoyed doing a lot of low-maintenance/free things. There are SO MANY free things to do on and near campus towns anyway.</p>
<p>I would have been thrilled if our folks offered to match our savings at any point. To help our kids with their ROTH IRAs, we opened one in each of their names, matching their total income for the year. They are expected to add to it and I believe they will.</p>
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<p>Mind you, I was reading a* newspaper summary *of research…lots of global terms thrown around. My guess is that if a person has any condition that gives them very poor impulse control, it’s likley to show up as excessive spending…and/or excessive eating…and/or hoarding…you get the point. My warning was that if your child is extremely impulsive, he may well be an extremely impulsive spender, given the chance (e.g. a credit card.)</p>
<p>Both of our kids had to take a, I’m not sure what to call it, “life skills” or “consumer education” class in high school. Both regarded it as, in large part, a “bs” course. However, based on comments and discussions over time I think that they did learn quite a bit about money management, among other things.
Both had summer jobs during high school and saved the lion’s share of their earnings, knowing they would be responsible for discretionary spending in college. While both were eligible for work/study, only my daughter chose to do it, using that money for day-to-day discretionary spending and keeping her savings in reserve. While living in dorms one of their greatest “cannot be avoided” expenses was laundry.
My son got a credit card in the fall of his junior year, prior to his semester abroad. We received the statements at our home address and would pay only the monthly minimum (in case, he ever “forgot” to make a payment). He would make his payments online, usually paying in full each month. One thing that surprised me, but worked for him, was that he would use the credit card for everything. I thought that merchants had a minimum for credit card use, but I have seen many charges under $10 on his statements. My daughter will turn 21 this fall and we have talked about her applying for a credit card. She is actually a little leery about doing it, afraid that she may be tempted to overspend.</p>
<p>When I started feeling like DD’s ATM machine in HS, I knew I needed to put an end to that, and fast.</p>
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<li><p>Summer before senior year, she had a camp CIT job and made a few hundred dollars. Told my very social daughter that had to last through her fall sports season till she could get a job. She landed a weekly babysitting job that gave her just enough, then another every other week job in January that also gave her cash. Believe me, it wasn’t a lot, but it did force her to make judgment calls on money. No more Lord & Taylor. Instead, she learned how to shop for bargains at local stores. She decided she didn’t really like ice skating so she’d rather stay home than spend HER money. She also knew she had a problem with money in her pocket so she asked me to help her monitor. </p></li>
<li><p>This was all great practice for her freshman year at college. She made significantly more money that summer as camp counselor and I talked to her about how much that meant she had to spend on a monthly basis at school. That didn’t go so well the first couple of months (freedom can be a dangerous thing!). I reminded her that she’d be out of money by January at this rate and she got a grip of her spending.</p></li>
<li><p>This summer, she has money left from the school year (from last summer) and doesn’t even want to go through that. Her plan is to have some left plus the money she makes this summer (which is more than last summer). She has learned that she has to make choices about what to spend her money on. And she’d rather not buy food when she doesn’t need to because she’d rather save it for Amtrak tickets to visit her friends at other colleges during the school year.</p></li>
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<p>As someone pointed out, there is not a lot extra that has to be paid for at college. Drug store items is one category I can think of. DD can make choices with HER money. I certainly like to surprise her with things (even some extra money sometimes), but she knows that can not be counted on. She uses a debit card at school (does not keep a lot on it) and has a credit card for emergencies (she calls me when she wants to put something on it - either something I have agreed to pay for or something she says she will be paying). I’m happy how this went this year.</p>
<p>This was kind of long, but I hope there are some tidbits here that can help others on this thread.</p>
<p>My son took a personal finance course in undergrad school. He said it was fabulous and he thought it should be a required course.</p>
<p>A personal finance course should be a mandatory course for every freshman. Once the kids are away at school there are not as many teachable moments regarding finances.</p>