College Economics 101
College students all over the country are putting away the sunscreen, packing up their possessions and heading back to school.
For parents, this can represent a period of high anxiety because for many it means that monthly expenses are about to go way, way up. In times where family budgets are tight, it pays to get your college students organized and primed to help keep the costs down wherever they can. The good news is that a little Economics 101 will go a long way to keeping those costs contained.
Alicia on “A Balanced Budget”:
It can be hard to say no, especially if your child is surrounded by others with more means. Before your college student takes off this year, take a moment and tell him that your goal is to provide an education, not enable a lifestyle. Remind her that in a dream world, you would be able to cover every incidental — from new clothes to sorority dues — but doing so deprives her of the gift of responsibility. Then give your student a budget to manage.
Instead of paying for things as they come along, put the amount you can afford on a card. Then, have your student list all the things she needs and start creating a budget. Your role is to ensure she sticks to that budget. If she calls asking for more on the card, explain to her what a budget means in real terms and tell her she will get a new card next term.
Sarah on “Buy Low”:
Point those newly in charge of budgets to big savings on basic school supplies. The office superstores and big-box retailers like Wal-Mart and Target are looking to lure shoppers into their stores with unbelievably priced back-to-school items. We found notebooks for a nickel and packs of pencils and pens for a penny. This is the time to stock up on school supplies like tape, paper, pens, markers and notebooks. Buy enough of the basics for the entire year, as they are cheaper now than at any other time of the year. Remind your student that every penny saved on the basics can be put toward more fun purchases.
Here a few additional ways to help your college student get organized to manage those debits and credits more effectively.
#1: Buy Used
Depending on whether a school goes by semesters or quarters, your student will have to buy anywhere from 25 to 60 books in a year. Fortunately, there are a lot of great strategies for saving money on books. Most campuses have used-book sales that are fantastic sources for good-quality used books. Another possibility: shopping online for used books. Another: library books. They are free and have a side benefit of increasing visits to the library, which is a great place to get work done anyway. Since no library can have all the required books, another option is international editions. They are substantively the same as the American editions and are almost invariably less expensive. For those, go to sites like AbeBooks.com or TextbooksRus.com.
#2: Buy — Don’t Rent
Cut costs on fleshing out the dorm room wherever you can. Avoid rental companies like the plague. It may seem like a good short-term solution to rent, but you will pay twice what it costs to buy things — like TVs, microwaves and fridges — and you won’t own them at the end. Instead, buy appliances at places like Goodwill or other secondhand stores. Remember that most items for the dorm room aren’t likely to end up as family heirlooms.
#3: Earn It
If your student needs an income to make ends meet, there are many work-study opportunities available on campuses. On-campus jobs provide the extra spending money, while dorm advisory roles may actually cut the rent cost. Or you may want to have your child work for a year before starting school. AmeriCorps, for instance, provides valuable work experience and money while also doing important community services. The ancillary benefit is that it allows a person’s head to clear and be more focused heading into college.