Budget 101

Asking for Money?

I can vividly remember being in college and having to make the dreaded call home to my father to ask for money after I blew through my monthly budget. My parents had three daughters at UF at the same time, so finances were a sensitive subject. This was before cell phones (think wall-corded phones, even) and — GASP!! — before the internet. Banking required you to wait for the statement to arrive in the mail. My father, who happened to be a CPA, would go through each statement to see where we were spending our money. He felt they gave us reasonable funds to make it through the month, with monthly deposits working best for them to effectively provide for the three of us. Since we only spoke once a week on those landlines that charged per long-distance minute, my having to mention needing money was not exactly a preferred topic for either party. But during college breaks, that’s when he sat me down to discuss why I bounced that check, how I was not living on my allotted budget and other financial issues where I had missed the boat or even sunk myself.

Yes, I had student loans. I also worked during the summer. (My parents wanted us to focus on our grades so they didn’t want us working during the semester). But, to be perfectly honest, I wasted a lot of money…on food, clothes, going out, drinking (the drinking age in Florida then was eighteen), and heaven only knows what else. I have no doubt that had I paid more attention to where I was spending my money, I could have made do with a lot less. But isn’t that part of what college is all about? Becoming financially savvy is just one part of learning how to navigate the real world.

Learning to Budget…

…or my turn on the soapbox.

When my older daughter went to UF, the tables turned quickly. Then it was her texting or emailing me when she needed more money. While she did have a credit card, it was for emergencies only. Our definition of an emergency included the car breaking down, any health issues, and unforeseen concerns for safety and well-being. It did NOT include an annual blow-out sale at her favorite store or the buying of alcohol. We were fortunate that we had Florida Pre-Paid and she received the highest level Bright Futures award, but there were still plenty of other expenses to cover. They included her apartment or living in a sorority, food for her and gas for her car, textbooks, and supplies, plus the local and technology fees that we had not purchased with Florida Pre Paid.

Like my father before me, I would sit her down every time she would come home. Line item by painful credit card line item, we would review exactly how she was not adhering to her budget. By her senior year, she knew that she would have to tap into her savings account to fund the incidentals not allocated for in our financial support. We wanted her to learn how to live on a budget. While she was fortunate enough not to experience any true financial hardship up to this point, she would eventually be on her own. We wanted that to be less of a wake-up call to reality and more of the next, expected stop on the adulting train.

How Much?

That question of how much money we should give them as a “college allowance” generates a lot of responses. Yes, your family’s personal financial situation is the starting point, as are the family financial decisions and values you’ve factored into all the steps that have brought you this far. But, like the underlying reason for HaveUHeard and our community of conversation, it’s always helpful to hear the whats and whys of how other parents and families are managing these “new to us” circumstances. We asked many friends, friends of friends, and also asked my daughter’s friends to weigh in from their perspective.  All those inquiries and posts produced enough answers to make your head spin: positive, insightful, loosey-goosey, and hard-and-fast.

What I Will Pay For

So, after all those conversations, here’s where we went with our decision.

I recommend anywhere from $50-$100 per week. Should you give it to them weekly or monthly? Recommend weekly to start and see how it goes. Should they get a job? That really depends on the course load and if they can manage both. Basically, I created a reasonable budget using the same format I use for myself. This money is to cover all of her expenses after rent, books, and gas for her car. The books and school supplies were to go on my credit card (which was also there for emergencies.) Some dorms do require a meal plan (hers did not). Food allowance and payment methods have varied, depending on whether the semester featured a meal plan or an apartment that had a refrigerator and pantry that needed to be stocked. In addition, some girls belong to sororities, which have dues that provide meals (but usually not on weekends). My daughter eats most meals at her sorority house, but if she chooses not to (I’ve already paid for this), then that falls within her monthly allowance.

If she chooses to use her allowance up on pedicures, sushi, and daily visits to the coffee shop, then learning that peanut butter and jelly can help balance her budget is valuable knowledge. And I’m here to tell you that I will not pay for alcohol. I’m not sticking my head in the sand and pretending kids won’t go out and find a way to drink if that’s what they want, but I don’t have to pay for it either. They can use their summer earnings for that.

The point here is that I am looking for her to learn to budget her money. My goal is to see her supporting herself after college and I’m optimistic this may ease her into that realm.

More Bottom Line Thoughts…

Consider having your students get their own credit cards.  It is a great way for them to start learning how to budget themselves while building their credit for when they are out on their own. Here are some of our credit card recommendations.

Suggest your student look around campus for free activities. There really are a lot, including over 1000 organizations at UF. Getting involved in one or more almost guarantees things to do and ways to socialize. Often, club activities are included in membership or are reasonably priced. Game night is also a fun option. I was surprised to find board games mentioned when talking to students, especially those that lived off-campus. They explained that some nights it was fun to just stay in, play, and hang with a bunch of friends. Even they recognize that work-hard-play-hard should also include chill-out!

Perhaps your student has a job while at school and won’t ask you for a thing. Maybe that job is to pay for the extras like nights out, a spring break cruise, or next semester abroad. My daughters have worked during summers since they were thirteen years old and have saved money for exactly this time of their lives. They pay for most of the extras and, I can honestly say, it has taught them to really give thought to their purchases. Adulting, here they come!

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