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How Much Spending Money Will Your College Student Need?

Diane Schwemm

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Parents of incoming first-year college students have a big question: "How much spending money do kids in college need these days?" Hand in hand with this is the question of who is responsible for this amount.

Parents of current college students also need to revisit spending needs each year (and sometimes mid-year).

Families almost universally agree that students should be responsible for earning and saving money for at least some of the "extras" they'll need in college, but there are many variables:

  1. How does your family define those extras? Will spending money include books, clothes, and travel expenses?
  2. Is the social life on or off campus? Do most students go home on the weekend?
  3. Location is a factor — the cost of everything tends to be higher at an urban campus (though internet shopping is an equalizer).
  4. Will your student have a car on campus?

Start with a Conversation (Take Notes!)

The first step is to discuss who will pay for what (beyond tuition, room, and board; this is a separate strategy session) for the next four years.

For example, "We said we would pay for textbooks freshman year, but after that, they would know what to expect and would have to cover those expenses," said Laura, parent of a college student and two graduates. In addition, "We sent them off to college well stocked with clothing," but after that, they paid for their own clothes except for a few special items (an interview suit, a nice dress, and winter coats).

Other expenses to discuss:

  • Share of the phone bill
  • Linens and dorm furnishings
  • Laundry money
  • Food/drink outside of the meal plan
  • Entertainment
  • Local travel (bus pass), travel home (train, plane)
  • Recreational travel (spring break?)
  • Electronics
  • School supplies
  • Personal items (toiletries)
  • Sorority/fraternity dues

If your student will take a car to college, there is auto insurance, campus parking permit, gas, repairs/maintenance, etc.

"Making things clear — what we were willing to pay for and why — has helped," Laura reflected. "It also helped to talk about financial matters as they grew up. There are choices involved in everything."

The Summer Before College: Work, Save, Plan

Now that you've discussed how much they may need each semester, you can help them set a goal for their summer earnings. Some students have already been working and/or saving gift money and have built up robust bank accounts by the time they graduate high school. Others are just getting started. A summer job should allow them to add $2,000–$3,000 or more.

As your student evaluates what's in their savings/checking accounts, you can talk about the advantages of maintaining a level of savings throughout college. It's a good idea for them always to have a cushion in case of an unexpected expense and aim to graduate with a healthy balance in the account.

Winter and spring break can be good opportunities for your student to earn money in a short-term position or by picking up extra shifts at their on- or off-campus part-time job.

Allowances and Parental Supervision of Spending

Some families give their students a monthly allowance, ranging from $75–$225, to supplement the student's own savings. An allowance may no longer be necessary after the first year, especially for students making good money through summer employment.

Cathy recommends a student checking account linked to the parent's account. "They use their ATM card as needed, but you can see EVERYTHING they spend $$ on." Her daughter receives a $200/month allowance which is easy to set up as an automatic transfer; they can both view her spending habits and increase the allowance if needed for legitimate expenditures "or cut back if she's eating too much fast food."

Scott had a similar approach: "I deposited a monthly allowance directly into my daughter's bank account, and that money was hers to spend or save. We decided on an amount before she started school and reviewed it after her first semester and first year, agreeing on any changes."

I firmly believe in having students contribute as much as reasonably possible so they don't take their education for granted, learn to budget, and take pride in their success. – Beth in California

Some parents help their students budget by taking charge of the student's own earnings and then doling it out in monthly installments as an allowance. Others put their students on their own credit card accounts — again, they can see the charges and talk about it.

Here are a few questions to ask your student and yourself:

  • Will the student be in charge of their own savings?
  • Do you want to control the amount of money available each month, at least for the first semester or two?
  • Will you see their bank account activity?

Working During the School Year

Many students get campus jobs to keep money coming in, even if for just a few hours a week. Some parents prefer their students to settle in and wait until the second semester of their first year or sophomore year to get a campus job.

Your student may qualify for work-study as part of their financial aid package, but there should be plenty of employment opportunities even for students without work-study.

While in college, Beth's two sons held multiple jobs in meaningful and fun areas (recycling truck driver, writing tutor, climbing wall instructor, research assistant, and tool shop proctor, to name a few!). One started working during the first year to supplement his allowance, and the other waited until sophomore year. "They enjoyed the jobs and liked earning money."

They didn't need an allowance after the first year because of campus employment and solid summer earnings. But Beth observed, "If our kids had been college athletes or heavily involved in non-paid extracurricular activities like the school paper or student government, we would have had to help them."

Parents agree that it's essential to prioritize studies and extracurriculars. Laura said of her older daughter, who held numerous campus jobs — some resumé-building (tutoring, TA) and some not — "she liked to make money, and she liked to be busy. She cut back on her jobs as she got more involved in campus activities."

Off-campus jobs are great for some students. Brigitte was thrilled to see her daughter really loving her university community, even beyond the boundaries of campus: "Getting a job in a restaurant made her feel like she really lived there, so much that she wanted to stay during her vacations to work and be with friends."

Many students do not work during the academic year or work minimally, and there are good reasons for that, too. Scott said, "We took the position that our daughter's job was school…. In general, we tried to give her four years of experience that would help her grow as a person and find a direction for her career. She'll be working for a long time after college!"

Odds and Ends

  • "If big expenditures come up — a new phone, car repair — we talk it through and usually split the cost with them."
  • Encourage your student to think ahead about the extra expenses that might go along with a semester abroad (primarily extra travel while in another part of the world).
  • "My older son is now living off campus, and we give him the money that we would have paid the college for his room and board. He is budgeting it — paying his rent and shopping/cooking for himself."
  • Revisit financial needs and also the intensity of your student's schedule (increased academic pressure, etc.) each semester or year.
More College Money Topics
Thank you to college parents Laura, Beth, Scott, Heather, Brigitte, Sarah, Kathleen, and Cathy, whose children study or study at campuses large and small, public and private.
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Diane Schwemm is the former Senior Editor and Content Manager at CollegiateParent and the mom of three young adult children in their twenties. She lives in Boulder, Colorado, and loves books, gardening, hiking, and most of all spending time with her new grandson.
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