Planning for college is more than choosing a college

By Lori Hendrickson, University of Minnesota Extension

As this school year comes to a close, many students are planning for college. Students are usually concerned about their financial aid papers, acceptance letters and the formalities that go with choosing a college. What they may not be thinking about is creating a spending plan for college life.

The months preceding college make for an excellent time for parents and students to work together on planning the daily costs of living during the college years. Think about the direct costs of college: tuition, fees, room and board. Also think about the indirect costs, including books, materials, transportation, trips home, phone, utilities and computer. Then there are personal expenses like food, laundry, clothing and entertainment. Next, take those spending categories and set up a plan for spending and saving.

This is also a time to discuss credit use and overuse with students who may not have had experience with credit in the past. Often parents choose a secured credit card or a card linked to their financial institution as a beginning credit experience for their young adults. Secure cards are provided with a small limit, usually secured by money equal to the credit limit. Credit cards linked to a financial institution may provide an opportunity for parents to monitor credit use and teach financial responsibility. Parents should investigate the possible options and discuss these with students.

Another consideration is to discuss how some expenditures may be shared with roommates. Students should be encouraged to have a discussion with roommates at the beginning of the school year as to how expenses might be shared. Open communication with roommates early in the relationship will provide opportunities to clarify expectations.

Overall, assisting students to prepare a spending and saving plan will provide them a basic awareness of their daily living expenses that may occur during their college experience provide a starting point for a healthy financial start in adult life.

(Lori Hendrickson is a family resource management educator with University of Minnesota Extension.)