Going to college is an expensive venture. While tuition costs are clearly printed on schools' websites and in catalogs, the amount of spending money a college student needs may be difficult to determine. Pinning down an annual amount of money needed for college depends on many factors, including what one considers spending money, activities, and the geographical region where the student attends college.
|Budget Category||Annual Amount|
|Food (assuming that most meals are eaten on campus)||$500-$1,000|
|Books and school supplies||$400-$1,200|
|Travel (amount dependent on how far away from home you go)||$100-$1,000|
The more conservative numbers add up to a total of $3,850, while the more generous numbers add up to $11,000 per year. Most students will fall somewhere between the two. Since many college students work, and earn an average of $5,000 to $6,000 annually, they should not need any help with "spending money." Summer and part-time jobs may well be able to cover these expenses.
One of the reasons it is difficult to determine how much your college student may need is that different people consider different things as paid for with "spending money." For example, some people have already factored the costs of textbooks and parking on campus into the cost of attending school. Loans are based on this yearly required amount. However, many parents consider things like books to be something that a student buys during their college career, requiring spending money.
Textbooks are extremely expensive (costing anywhere from $200 to $700 per semester), and they're required. Parking on campus is another hidden cost of college, which can be a small expense of $100 for the school year, or a much larger one. While some may not see a car as a necessity, college students may think otherwise.
In order to calculate spending money accurately, you first have to agree on what purchases fall into the category of spending money, and what is simply a cost of attending college.
Possible Spending Money Types
The following items may be deemed spending money for college students:
- Food (eating out, ordering pizza, coffee to go, which may not be included in the food budget for the year)
- Gas or public transportation
- Cell phone
- Activities such as soccer club, a dance class, or gym membership
- Textbooks and school supplies
- Electronics (including a computer)
- Travel allowance (to come home for Thanksgiving, etc.)
Some items vary widely. For example, if a travel allowance is included and the student goes to school quite far from home, coming home could cost $500 to $1,000 per trip. Deciding whether to include such expenses in spending money totals is important. Once you decide which items to include, you must estimate how much money to allow for each.
Amounts for Each Type of Spending Money
While some college students need a sizable clothing allowance each month, other students do some shopping in the summer and head to school with their wardrobe ready for the year. Likewise, some students participate in expensive activities while others do not. While both types of students will need a considerable amount of money to spend, calculating a total depends on the types of activities in which they participate.
Finally, the geographic region can heavily impact the amount of spending money a college student needs. Necessities like rent and groceries are more expensive in big cities, but students on rural campuses will spend more on gas or public transportation than those living in the city.
Setting Budget Expectations
Before sending your teen off to college, it is important to discuss the financial aspects of their campus lives. For most, this is the first time they have been on their own and had to plan their budget. A student with poor budget awareness may run out of money necessary to buy books, pay tuition, or for other important expenses of living. Likewise, many college students may be working with credit or debit cards for the first time in their lives, and without proper guidance, they may exhibit poor spending control and tracking. While this may merely be a bump in the road for some students, for others it may mean the difference between being able to attend college and not.
Before your teen heads off for college, discuss the following:
- Teach them how to track monthly spending and reconcile it to their budget.
- Share potential budget pitfalls and talk through strategies for dealing with them.
- Discuss the difference between wants and needs. Teach your child to pay for necessities first, and then use disposable income to pay for discretionary items.
- Show them how to track debit card spending and reconcile their account each month.
- Share your expectations with your teens about how they will manage their money. Do not bail them out every time they overspend.
- Show them how to build an emergency fund in case something arises.
- After your kids go to college, continue to have budget conversations with them so you can identify problems before they arise.
Preparing Your Teens
The best way to prepare your college student for a successful financial experience is to start early. Stress savings from an early age, and encourage kids to track spending. In high school, consider giving your child a teen account to manage themselves so they know how to handle money when they go away to college. By laying the foundation early, you can set your teen up to succeed when they are finally on their own.