Kids & Money

Five things to discuss with your freshman

Your college freshman is home for the holidays, carrying a few extra pounds, a head full of hair, a couple of tattoos — and some interesting arguments about why he needs more cash to cover his personal expenses next semester.

Starting with the Sunday night dining ritual with his dorm mates, the cost-of-living reasons include occasional runs to the grocery store for snacks and energy drinks, the morning coffees at the student union, the dues owed to the fraternity, and the activity fees for rafting trips and rock climbing.

Sure, it’s the holidays and you want to keep the peace with everybody home. But no matter how stressed and busy you’ll be, it’s imperative to find time for a sit-down with your college student to review his spending habits and deal with any other financial matters that could come up when classes resume in January.

Here are my freshman five to address:

• Monitor the checking account. Why is your daughter running short of cash each month? Was the $250 monthly deposit in her account to cover personal expenses unrealistic? Have there been unforeseen expenses? Is she running with a crowd of shoppers? Ideally, you’ve been monitoring her spending online or with the paper statements all semester, but now would be the time to tweak. By the way, the $250 monthly budget for personal items comes from the College Board.

• Get a debit card. If your college student has been writing checks and paying with cash — and handling money responsibly at that — it’s time to graduate to a debit card. With a debit card, you can easily monitor the account online and replenish with funds when necessary. The down side is that a debit card won’t help your child develop a credit history.

• Time to add a credit card? The best option is to add your student as an authorized user to your account. That way, you control the account, but your child can start building a credit history. And if your college kid is misusing the card, you can have him removed from the account.

The other approach is to co-sign on a credit card account. It would be in your child’s name, and help start him on building a credit history.

• Taking a car back to campus. If your freshman didn’t have a car at school during the first semester, but will be returning in January with a set of wheels, alert your insurance agent. You might actually shave a few bucks off your auto premium, depending on several factors including whether the campus is in a small town or an urban area. Factor into the budget a campus parking permit, gas money, an oil change and possibly other maintenance issues.

This would be the time to discuss whether the roommate can borrow your son’s car, and the consequences of any accidents.

• Check the health care coverage. You thought your HMO covered your daughter who attends college in another state. It wasn’t until an asthma attack sent her to a hospital emergency room that you discovered the hole in your coverage. “Be forward thinking when it comes to health coverage,” said Carrie McLean, a health insurance expert with eHealthInsurance, the online consumer website. One option: An individual health policy offered by the school that generally comes with low premiums — and basic benefits. Check the coverage carefully.

Those are my top five. Here’s one more that can hit the pocketbook: How’s the school measuring up? Were there problems enrolling in the classes that could add a semester to tuition tab? Do you need to switch to another food plan? Are the teachers graduate students, professors, or even visiting professors filling in for the first string?