Budget 101

Learn this now!

I can vividly remember being in college and having to make the dreaded call home to ask my mom for money. I was the last of 3 kids she put through college, so she had heard it all. This was before cell phones (think wall corded phones) and, dare I say it, before the internet. Banking required you to wait for the statement to arrive in the mail. My mom would go through each statement to see exactly how I was spending my money. She used to joke all the time about that funny college saying “How can I be overdrawn I still have blank checks”…. Since we pretty much only spoke once a week (On Sunday night when rates were cheaper, again, no such thing as texting, emails or cell phones), having to mention needing money was not exactly what I wanted to talk about. During college breaks, she would sit me down to discuss why I bounced a check, how I need to learn how to live on a budget and other financial issues.

I had grants, student loans, and I also had work-study and worked during the summer. Finances were tight but somehow my mom made it work, but if I wanted to spend money and some extras I had to work while going to school. And, 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 lord knows what else. I have no doubt that had I been more aware of where I was spending my money, I could have gotten by with a lot less. But that is part of what college is all about; learning how to navigate the real world. Becoming financially savvy is part of that.

When my older daughter went to UM, the tables turned quickly and now she would text or email when she needed more money (less confrontational than over the phone). She also had a credit card for emergencies only (and we defined what constituted an emergency – car breaking down, health issues, true emergencies- not a sale at a store or buying alcohol). She also has a debit/credit card that I can easily transfer money into at a moment’s notice. It also gave me access to her full banking account so I could see where she is spending the money. We were fortunate that she was awarded considerable merit aid but there were still plenty of other expenses that we needed to cover including her apartment/living in a sorority, gas for her car, books, and supplies, and an endless need for incidentals like Starbucks, Uber rides and Netflix.

And like I had to with my mom, every time she would come home, I would sit her down and line item the credit card because she was not adhering to her budget. By her senior year, she would have to go into her savings account for the money for incidentals we were unwilling to pay for. And, we wanted her to learn how to live on a budget because, while she is fortunate in that she has not had to endure any financial hardship, she would eventually be on her own and that is a real wake up call for many of our kids.

The question of how much money we should give them for, let’s call it a college allowance, generates a lot of responses, both positive and helpful, and some insightful posts (anonymity will do that). Having asked many of my friends and also having my younger daughter speak with her friends, the one thing I have quickly learned that there are enough varying answers to make your head spin. In addition, your family’s personal financial situation, your family’s values factor into this decision.

What I Will Pay For

What I can tell you is that I will not pay for alcohol. I am not sticking my head in the sand and pretending kids won’t go out and drink, but I don’t have to pay for it either. They can use their summer earnings for that stuff. Books and school supplies were to go on my credit card (which was also there for emergencies.) Food, depending on whether your student has a meal plan or lives in an apartment (even on campus) may vary.

I gave my daughter different dollar amounts per month depending on where she was living that year and if she had a meal plan. It ranged from $300 (living on campus with a meal plan) to $800 (Living off-campus with no meal plan) All freshmen that are not commuter students are required to live on campus with a minimum of 14 meals a week meal plan. Basically, at the beginning of each new school year, I created a reasonable budget, as I do for myself. This is to cover all of her expenses after rent, books, gas for her car. If she chooses to use her allowance up on pedicures and sushi, then peanut butter and jelly can help to balance her budget. The point here is that I am looking for her to learn to budget her money. It is my goal to not have to support her after college and optimistic this may ease her into that realm. 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. Our credit card recommendations.

Mention to your student to take a look around campus for free activities. Many clubs and organizations have events out on the breezeway during lunch and other locations across campus during dinner time that provide snacks or even a light meal! Bagels, ice cream, free food trucks, pizza all the time, falafel happy hours at Hillel. There are so many places to grab fee grub at UM, your kid will most likely never go hungry. Getting involved in one or more clubs guarantees things to do and ways to socialize and fill an empty belly. Often club activities are included in membership and are fairly priced. Included with your Cane Card and with up-to-date and paid student activity fees, students are also permitted to see all the theatre and Frost School of music productions (on designated student nights), hear guest lecturers, listen to concerts, discover the Lowe Art Museum on Campus, see a movie at the Bill Cosford Cinema and stroll around the Beaux Art Festival that happens right on campus every spring.

Remember that the University of Miami is a hub of activity for the entire city. Many wonderful cultural, academic, and stimulating events and activities happen on this beautiful, vibrant campus daily. Game night and Movie nights are popular and also a fun option. I was surprised to find board games mentioned when talking to students (that lived off campus). They explained that some nights it was fun to just stay in with a bunch of friends and play. Of course, I am sure some turned into drinking games. I am not condoning that; just sharing. 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 daughter worked during the summer to save money for exactly these types of activities. She pays for many extras and, I can honestly say, it has taught her to really give thought to her purchases.

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