Thursday, July 27th, 2017

Financial Advice for Parents: Keep Your Kids Above Water

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college age kids of boomers1 Financial Advice for Parents: Keep Your Kids Above Water
Guest post by Cathy Pierce


For some of us baby boomers our kids are just now entering college. And guess what…Your job as a parent doesn’t end once your kids go to college. In fact, this is a critical stage at which you can help shape your child’s lifelong behaviors.

Some of the most important lessons you can teach during college have to do with finances. You can help your kids keep their heads above water by showing them smart ways to budget money, earn more cash, and save for the future.

Making a Budget With Your College Student

Before going to college, most children have few financial worries. They don’t need to think about how much housing, energy and food costs because their parents always pick up the tab.

Going to college can change all that because it’s a time when kids are introduced to new responsibilities.

You can help ease the transition to college life by making a budget with your child. Spend some time focusing on creating a realistic budget that sets aside enough money for life’s necessities. If your child has decided to rent an apartment, then you’ll need to consider how much rent, heating, water and trash collection costs each month. You will also need to consider how much money your child needs for tuition, books and laboratory equipment.

Once you know how much money your child needs every month, you can create a plan that sets aside some money for entertainment and savings. Ideally, your child will have enough income to pay for all of these expenses. If not, then she’ll have to make some sacrifices or find a way to make more money. You can also choose to help out by making monthly

contributions to a bank account in your child’s name. That way you can reduce the financial burden and give your student more time to focus on studying.

Find Sources of Income

You can also help your child by finding creative sources of income. Many college students get part time jobs to earn cash, though often, that’s not enough.

Spend some time filling out FAFSA, scholarship applications for departments, and grant forms with your child. It’s not the most exciting way to spend an evening, but it can help save thousands of dollars. Even if your child only receives a small grant or scholarship, that’s free money that can help make life easier.

Save Money Creatively

When filling out FAFSA forms, you will notice that parents and students have to provide information about their incomes. That’s because students and their parents are expected to contribute to educational costs. The student, however, is expected to cover more of the cost than the parents. Financial aid offices estimate that children should spend about 20 percent of their total value. That includes money in savings and checking accounts.

Parents, however, usually contribute under six percent. Your student can, therefore, qualify for more financial aid by keeping money in an account with your name on it. This will lower the overall financial expectation for the family.

CONCLUSION

If you find that your family has problems paying for tuition, housing, books and other fees, then talk to the school’s financial aid counselor to learn about options that will work for your specific circumstance.

About the author: Cathy Pierce was a business professional turned stay-at-home mom. She likes to travel, but likes being home just as much. She loves my kids, good food, good TV, and the Web. Follow her on Twitter/MrsCathyPierce.

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