7 Money Tips for Parents of College Students
Help your child avoid financial pitfalls while they’re away at school by following these six steps.
Every year thousands of high school graduates head off to college and many of them are not financially prepared. Yes, they are adults and responsible for their choices, but parents can help them avoid financial pitfalls by reviewing the following financial checklist with their college-bound children.
College student money tip #1: Have a checking and savings account
The accompanying debit card that can be ordered with a checking account is a convenient way to handle day-to-day spending while at school.
A savings account is a good place to keep money for emergencies. Most students drive older cars that will likely need unplanned repairs. Having at least $500 to $1,000 in a savings account, set aside for emergencies, is a must.
When your student opens a Zions Bank Anytime Checking Account* through Sept. 13, they’ll get a free water bottle (while supplies last) and be entered for a chance to win one of two dorm room prize packages. Official rules apply.**
College student money tip #2: Establish a budget
There is a lot of stuff going on when attending college for the first time. Only a small number of students will naturally take to budgeting. (Actually, only a small number of any adults take to budgeting.)
Zions Bank customers have an easy way to track their spending by using the OnCard reloadable prepaid debit card. A smart move for parents is to order one for their college-bound student for a small $3 fee.
OnCard is super convenient because you can reload it at no cost via online or mobile banking, and you can track spending with the integrated budgeting app. The app tracks where the money is spent, by category, so you and your student can review and evaluate if their finances get an “A” grade, or if they need improvement.
And unlike with cash — which if lost is gone for good — if their OnCard is lost or stolen they can lock the card and dispute any unauthorized purchases.
What’s more, the good habits learned from using this payment card can spill over into your student’s regular checking account spending.
College student money tip #3: Understand how to spend 529 plan money
If your student is fortunate enough to have a 529 plan set up with college savings, you need to be careful how you spend the money at college.
Tuition and books are a “yes.” Transportation and extracurricular activities fees are a “no.” Room and board is a “maybe.” Consult 529 plan rules and talk to a tax adviser so you don’t get in trouble with the IRS by spending funds on non-qualifying expenses.
College student money tip #4: Look into renter’s insurance
If your student is living away from home, their personal belongings may not be covered by your insurance. They are at risk if stolen or destroyed in a disaster like a fire. While most students don’t have a lot of belongings of value, many do have expensive computers or musical instruments. Renter’s insurance is reasonably priced since students don’t typically require a large amount of coverage.
College student money tip #5: Get a part-time job
College is expensive. Only a small percentage of students can attend with 100% paid for by grants, scholarships and family assistance. Working part-time while in school will reduce the need to rely on student loans.
Working a job also teaches life skills that will carry into adulthood that you can’t get from a classroom. A student who goes through college without holding any kind of a job is at a disadvantage when entering the workforce after graduating.
College student money tip #6: Avoid identity theft and fraud
A young college student has limited experience with money so they can be an easy mark for identity theft, phishing, and other tricks to steal their money. College students should be trained to avoid identity theft pitfalls and use tools like purchase alerts and mobile card fraud alerts to flag unauthorized spending from their bank accounts.
College student money tip #7: Review your bank records at least monthly
Many people don’t bother to review their monthly bank statements. They may check their balance, but as long as their debit card is working, they don’t bother looking at their past spending.
Don’t make this mistake. Your student may overlook that they are paying extra fees for using a non-bank ATM or that their account is in overdraft and they are spending more than they have available. Your student may have unintentionally set up an automatic subscription that is billing them every month.
Attending college is a fun and exciting time with lots of surprises in store. Follow this checklist to make sure those surprises don’t pertain to money.
*The Zions Bank Student Banking suite of products includes Anytime Checking, a Visa Debit Card and digital banking tools that make it easy for students to manage their money. Please refer to the Deposit Account Agreement, Account Disclosure, Deposit Rate Sheet and Personal Account Schedule of Fees available in the Zions Bank Agreement Center, or visit a local Zions Bank branch to speak with a banker for more details.
**Official Rules Apply. No purchase or account necessary. Qualified entrants are limited to legal residents of the United States who are 18-25 years of age on the date of entry. Zions Bancorporation, N.A. employees, affiliates, immediate family members and individuals living in the same household with such employees are not eligible to enter to win. All tax liabilities, if any, associated with any prize are the responsibility of the winner. See Sweepstakes Official Rules for details and an alternative method of entry.
Don Milne is Financial Literacy manager for Zions Bank.