With Thanksgiving just around the corner, many students and parents are about to have their first holiday meal together since post-secondary school began about six weeks ago. For students, it has been a crash course in time and money management, and one thing is almost certain: there's never enough of either. As parents, we wonder if our child is getting enough sleep, keeping up with homework, and adjusting well.
There's so much to talk about, but the elephant in the room is sometimes about money. This Thanksgiving, parents and students should carve out some time to talk finances and revisit the budget to determine if spending is on track.
Hopefully before the school year began, parents and their college or university-bound children had an open discussion about where the money to fund that education is coming from, who's responsible for how much, and when. The goal is to make sure the funds last throughout the school year.
Now at the halfway point of the first semester, it is the ideal time to revisit finances and find out how your child is managing. It's early enough in the year to address any small issues before they become big problems. Whether living at home or away, there are a lot of expenses that come with being a student. Transportation, textbooks, rent, and groceries -- and that's before discretionary spending on meals out or the occasional movie
But the financial talk isn't just for freshmen and their parents. It's an evolving conversation and one that should occur regularly. The recent RBC student poll showed that the majority of students turn to their parents for financial guidance.
Even for upper year students, predicting spending needs before you start classes can be difficult. Take recent Carleton graduate Kirsten for example. She found first year was a repeat of high school in many ways with few pressures outside of maintaining the grades necessary to continue in her Commerce program. She lived in residence, had a meal plan and didn't work during the school year.
In second year, all of that changed. Living off campus meant rent, groceries, and commuting to school, as well as working part time. While Kirsten learned from experience how to balance competing priorities, she was able to stay on top of her finances by using what she learned from her parents and setting up a spreadsheet to manage her weekly budget. Online banking enabled her to track her spending quickly and conveniently.
Regardless of a student's financial situation, there are ways to alleviate some of the burden of managing finances on top of an already busy schedule. Before the last slice of pumpkin pie is eaten, parents and students should have an honest (and non-judgmental!) discussion around these four items:
• Revisit agreements: If you've set the foundation about who will pay for what, talk about whether the arrangement still makes sense and make adjustments as necessary.
• Evaluate your budget: Hopefully you set a budget together at the start of the year (but if you haven't, it's not too late to develop one). With more than a month of school under their belts, students now have a better idea if their budget is realistic. Take a look at where you are, and rethink your spending if necessary. Use one of the many online tools available or a simple spreadsheet to create your budget. Then check in regularly to make sure you are on track.
• Talk about your unexpected expenses: A recent RBC poll showed that many students wish they had known more about planning for the unexpected. Did you already need to repair your laptop or made an unplanned trip home? Anticipate and plan for those expenses by setting up a rainy day fund as a budget item.
• Review your banking needs: Your bank advisor can show you how different products work, point out savings and discounts specifically for students, and provide information and advice on paying for school. Have this conversation before school starts, and check in with your advisor again during and at the end of the school year. Get set up for online and mobile banking to help you quickly and easily track your spending, transfer money and pay bills.
The financial talk is not always easy, but it needs to happen. This will pay off in spades down the road as students learn good financial habits early and parents watch their children become financially independent.
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PASo you don't have to pay out huge, unnecessary sums if you get burgled (fingers crossed you aren't!)
altrendo images via Getty ImagesDownload a budget tool app to help keep track of your costs and potential savings. A good idea is to check your bank to see if they have one.