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What is the right answer?
I get emails from parents asking this question frequently. Herein lies the problem with trying to answer the question though – there is no right answer. We want there to be one right answer, but the truth is this is very personal decision for each family. Family finances and personal beliefs should and will color these decisions. But, this is something that every family should discuss so that there are no surprises and plans can be made for parents and students. It’s never too late to have this discussion although it’s best if it takes place before the student ever leaves for school. It is also a plan that should be reevaluated each year. Even if you plan to offer no financial support, helping your child understand the expenses they will face and how to budget accordingly is important.
So, if I give my student an allowance, how much is the right amount?
Again, this is a question I am emailed frequently but don’t have a magic answer for. I can, however, provide factors that should be considered for budgeting purposes and determining how much, if any, you will contribute to your child’s budget.Tuition and room and board are set amounts and can be found on each college’s websites. Books can vary greatly. Sites like Cappex and College Data can be helpful in getting a round number estimate for books.
Since there is no right amount, what should be weighed in the equation?
If you plan to contribute in any manner or are helping your student to plan a budget, here are the variables you need to take into consideration:
What type of meal plan will they have?
This would be the first place I would suggest starting in your thought process. Most students living on campus will have a meal plan [Read: Choosing the Right Dining Plan]. How many meals a day/week will it cover? If they have the gold plan (unlimited swipes) they will not need to buy groceries in the traditional sense, but a small grocery fund to buy personal care items and things for their rooms – mostly breakfast type items, bottled water, and snacks should be considered.
Do you consider it acceptable for your child to eat outside of the campus dining plan?
How often do you think it’s reasonable for your child to eat at establishments not covered by their dining plans? How about ordering pizza and other delivery food? Is it acceptable for you if your child regularly stops at Starbucks for costly coffee drinks? Is a nice lunch or dinner out with friends reasonable to you for your college student? If the answer to any of these questions was yes, money will need to be budgeted for this.
Will they be living off campus?
If your student will be living off campus, rent, utilities, and groceries need to be budgeted for. Grocery amounts are varied. Of course, if you have a six-foot football playing son who normally eats you out of house and home, he’ll need a larger grocery budget than my weight-conscious daughter who mostly eats salads and smoothies. This amount might need to be fluid for the first few months as you figure out the magic number. When you lease an off-campus apartment, they should be able to tell you what average utility bills look like. It might also be possible to have utilities included in the rent which makes budgeting easier and more exact.
What will be their mode(s) of transportation?
Will they have a car at school? With a car comes car payments, gas, insurance, repairs, and routine maintenance. It might also require a parking fee. Who will pay for these? If they don’t have a car and live off campus, is there a free bus to and from school and around town? How about taxis and Uber? Is this ever acceptable? How much is reasonable? The answers to these questions must all be considered in the financial plan.
Finally, a few other things to take into consideration…cell phones, clothing, healthcare/medications, sororities and fraternities, and traveling for school breaks. These items need to be budgeted for as well.
Your student’s budget will likely need to be reevaluated several times during their freshman year and then each year to follow. Whether you contribute or not, helping your child learn and understand budgeting will be a great tool for life. Click on this link for a budgeting tool: Student budgeting guide
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