<p>How do most kids handle their finances in college? Credit card, bank, do parents give them money? I dont know anything about it at all, since for the past 17 years Ive just gotten money if I needed it. Also, is what most colleges estimate for personal expenses in their tuition charts more or less than one typically needs?</p>
<p>My kids had their own checking accounts and credit cards in high school to get them used to things like that. They deposit part of their summer earnings to use for spending money in college, and to pay for books na dphone calls. They have a small amount deducted from their checking accounts for IRA retirement funds (like $75-100 per month). The bank is one that has a branch in our town (though they went to out of state schools) so if an emergency arose I could add money. The bank accounts and credit cards can also be checked online.</p>
<p>Good question. I think my niece had a prepaid credit card. Students need to learn to handle money and budget themselves. What is the most effective way for them to learn this?</p>
<p>thanks. so do kids take of their credit card bills and such? (sorry if I sound like I'm clueless or spoiled, but I just want to be clear about it before I go to college)</p>
<p>When my dd went out to NM [we're in the southeast], she set up an account with a bank near her college that allowed her free use of a check card. Then she verified her checking account with PayPal. If she had a sudden expense that her on-campus job couldn't cover, I could send her money through PayPal, and she could transfer it to her checking acct. (She was a film major, and had some large expenses for her production crew for her senior project.)</p>
<p>My older ds went to school in FL and set up an account with a bank that has branches in our state as well. I could deposit money in his account thru the local branch. He had a budgeted monthly amount to pay rent, utilities, and so on.</p>
<p>They didn't have credit cards, only check cards. That way there's no temptation to go over budget for the month and find yourself deeply in debt, with interest charges piling up. You can use the check card at places where a student's check might not be accepted.</p>
<p>We kept it simple. My daughter earned money by working summer and her long winter break. Deposited it in her account in hometown bank. Took debit card to college a few states away and took money out when she needed it. She'll probably get a credit card before September so she can start establishing a credit history and will have the bills sent to her at college. If she flies home, we pay for the ticket but that's the only time a debit card doesn't work. She pays for all her expenses at college.</p>
<p>Re credit card vs. debit card vs. "check card" ( not sure what the latter is). Some on cc pointed out in another thread the unpleasant surprise that a debit card is not denied if one unintentionally is about to "overdraw", thus occasioning a $29 overdraft fee. Imagine a single shopping trip for shoes at one store, shirt at another store, etc. and $29<em>x. That decided me against debit card.
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Students need to learn to handle money and budget themselves. What is the most effective way for them to learn this?
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I think this a most important question. [ul][li]Deciding what to do with summer earnings has been valuable: part to capital-S Savings (college, future), part to spending $, part saved for larger purchases (drum cymbal...) This could be started this summer if not done before[</em>]What we have done w S for a few years now is provide him a credit card on our account, with his name on it. Whenever he uses it, he immediately pays me what he has charged, out of his savings/allowance. This teaches him that credit card is a method of transacting, not a source of $$.[<em>]I plan to have him project a spending $ budget before he takes off in August. This will be his first real exercise in budgeting and I think it will be valuable.[</em>]Suze Orman just did a PBS show on the subject and has a book out. I taped but haven't yet watched the show, thinking it may be helpful. [/ul][/li]Would welcome other ideas.</p>
<p>Dd has a credit card in her name, and a debit card. She deposited her summer earnings in the credit union, and withdraws using debit card. She checks balance etc. online. She uses the credit card to build a credit history. The bills are sent to her here at our house, because her address will probably change each year. I pay the bill (on time of course), and she reimburses me every few months. She is in charge of all her expenses, budget etc, except tuition/room/board, which we pay. She is frugal and manages her money well, so there have been no problems - and she is building a credit history with the credit card.</p>
<p>Similar sentiment here. I think it's most important to get them handling their own bills and credit ASAP. Only in the worst of money management cases would I consider putting child on my credit card or paying his/her bills. Out of sight, out of mind, if they are not aware each month of their obligations. For both kids, they got free student checking (usually tied to savings account) with debit card and a student credit card with the usual student limit of about $500-$1000. Home address was statement/billing address due to frequent changes of college addresses. I forward them along to kids. They both are also able to check balances and pay on-line. S discusses each semester's budget with us and we provide him with just that amount. He pays everything from that (and I don't have to ask, nor do I want to know...). Extras are his responsibility from summer earnings/savings. D hasn't needed a penny since she is at an LAC with a small work study job and also has her summer earnings/savings.</p>
<p>M&B and anxious - I had thought not to bother with getting S credit card of his own right away. But your points are well-taken. Can I assume that there will be "student credit card" vendors/offers when he arrives on campus? Or shall we seek one out on our own? I am not worried about him as responsible with $$, but as an alumnus of the boy "wad" school of paper management, I guess it's time for him to start being organized about it too.</p>
<p>Jmmom - the student credit card offers made to your son will not be the best cards or companies. You want to encourage your son to always pay the full amount on time -- but just in case he doesn't, you want to go for a lower interest rate and know something in advance about the company's late fee charges & policies. (Some cards bill on a very short cycle). It's better to check on line -- and shop for a lower rate card with a lender that has a good reputation. Some of the offers you get are from companies that are considered predatory lenders.</p>
<p>jmmom - Hang in there, those boys do have a habit of coming around when we aren't there to rescue them. Even tho' S was decent about money management, it sure was enlightening for him to see real bills in HIS name. And I had a few chuckles on my end...</p>
<p>Yes, vendors are all over campus when those impressionable freshmen move in (with their impressionable parents). Our approach was a bit different though. S went to OOS big U that did not have any of our state's banks. During his summer orientation & registration, when I tagged along for a parent orientation, he opened a free student account and applied for student credit card at a bank that was down the street from his dorm and that had many branches throughout the state (Mich). Only requirement for student credit card was age 18 and enrolled student. His student checking was free as long as he kept $300 in linked savings acct.</p>
<p>D attends LAC in a state that has branches of a bank we have here. As soon as she turned 18 (May of sr. year), she opened her free student checking/savings account (and closed out the one she had for savings at our bank) and applied for student credit card with the minimal credit limit (thank goodness). Absolutely no problems whatsoever. And she went off to school already taken care of. Practiced using her debit and credit cards during the summer. Also was hit by the reality that they were HER bills! I loved it!</p>
<p>calmom - H & I are hated by credit card companies. We only use the ones that have rebates (1% or more), don't charge an annual fee, AND we pay off the balance every month. Without any big lectures from us, our kids seem to have taken the same stance. And, if they do ever need to carry a balance, I hope they would learn from that experience. My S had one late fee and was appalled at the amount of the fee as well as the interest charged on the balance. I suggested that he call the bank and make his apologies as many will credit these fees back for a first-time offense. He did and they did. He's never been late since.</p>
<p>M&B - ditto, ditto and ditto and I hope (and expect) it will have the same effect on our S as it did on yours.</p>
<p>Our D has her credit card, savings and checking accounts through Wells Fargo, because they have free checking for college students. She is linked to our account, and I can transfer money to her when necessary. (We pay for her apartment and books & supplies. Her tuition is covered by her scholarship. She pays for any of the "fun stuff".) She is very responsible; when she charges something she usually goes home and immediately transfers the money from her checking account.</p>
<p>Joint, airmiles, Credit Card with low max credit (5K) for large and internet purchases, joint ATM card for local cash usage. Big Bank joint credit card for later international use and standby use. All statements viewable online and statements to Home for monitoring of balances. All have low limits and cash balances to prevent OD's and ID thefts. </p>
<p>Voronwe, will have wealthy and healthy grandkids! How did you get your kids to contribute so much into their IRA's, especially at their age?</p>
<p>What is the kid doesn't work during the summer btwn hs senior year and freshman college year? Where does the "fun" money for freshman year come from then?</p>
<p>Thanks for all your help everyone! v. interesting</p>
<p>My dd has a free student checking acct (with BofA) because she is in a boarding school and needs access to her own funds and ability to make deposits her relatives send. She has her own ATM card. She does not have a whole lot of money going in or out, but I have an ATM card on her acct so I can put money in once in a while. I'm not sure if she really looks at her statements or balances her acct, but she has not bounced any checks.</p>
<p>I can't see that a college student should have or need a credit card, at least until they work and can repay funds, and/or are near the end of school.</p>
<p>A credit card is handy for online purchases like an airline ticket home. My D has one with a low credit limit & the bills come to me. She also has a local checking account for the majority of spending.</p>
<p>An "amen" to the caution about debit cards. All a merchant has to do is press the "debit against" button twice because he thinks it didn't go through the first time, and the card-holder's account can get emptied and put in the red, triggering overdraft fees. This happened when our son bought his >$200 snare drun. The store owner had no intention of harming him. The machine really said it didn't go through. </p>
<p>Just teach them to be careful and make sure they know never to throw away anything from a bank without reading it first! That was the big lesson ours learned from that one. He got the fees back, but this all happened at home where he is known because we're "practicing" while he's still in high school. </p>
<p>He's also learned from our modeling to rack up those frequent flier miles but always put the money aside to pay in full when the bill comes in. I'm not sure how well that stash of cash waiting for the end of the billing cycle will work for him in a dorm room, though.</p>