Off to college go the kids. For them, it's the thrill of independence. For parents, it's the thrill of victory -- and also the "cha-ching, cha-ching" of money, gobs of it, out the door.
There's the inevitable tuition and room and board, of course -- expenses typically paid up-front, before the semester starts. But for another category of costs, everything from cell phone bills to laptop purchases to good old-fashioned pocket money, the students may need to be in the driver's seat. Which raises some important questions: How much should you give your college kids as spending money? How much is too much? And how do you know they'll spend it the way you want them to?
Zogby International, a leading polling firm, asked parents whether they suspected their children were spending the money they sent for college expenses on other things. Surprisingly, 79 percent said "No." This is a touching show of faith. But as trustworthy as your kids may be, a little schooling from you in the financial basics will protect them -- and you -- from trouble down the line.
Let's start at the beginning, which is always a budget.
Simply, a budget is a description of "money in" and "money out." As a parent, you have some control over the "money in," especially if you're supplying it. But in some cases, your child will control the "money out." That's why it's important to sit down with your college-bound child and figure out a budget together.
The budget should include such things as books, cell phone costs, Internet access, snacks beyond the meal plan, entertainment, transportation, travel and personal items. Make sure to divide the expenses into one-time costs (such as books, often bought once a semester) and regular expenses, for which you'll need a weekly or monthly estimate.
Next: Teach your child bargain-hunting techniques >
