Discussing money helps lead youth to financial responsibility
The following is a special Monroe on a Budget column I have in today’s edition of The Monroe Evening News, in the graduation section:
By Paula Wethington
What’s the best way to explain to a young adult what the cost of living is like?
Let them learn a step at a time what it’s like to be responsible for their own living expenses such as rent, utilities, car insurance, vehicle repairs, and medical bills.
My daughter is now in graduate school, and is living in her own apartment for the first time.
But even when she lived at home and was in high school, we had frequent family discussions as to what expenses was her responsibility and what expenses were her parents’.
Every year while she was an undergrad, we’d look over the “cost of attendance” budget that her college compiled. I then reminded her of other expenses not in that budget that we still covered. This was good preparation for graduate school, as we now expect her to pay for the majority of her expenses. I’m still paying her health insurance, for example, but she’s paying any out-of-pocket medical bills.
Even if you, as a parent, will still pay some bills as my husband and I have done, be sure to have a discussion with your student in regards to the finances. Show your student how much each item costs, and discuss when he or she will be expected to take over this or that expense.
How well did my daughter manage her finances during her undergrad years?
There was only one time when she called home and said, “send money.” We laughed, and here’s why:
She was on a study abroad semester at the time. Before she left, she wrote out power of attorney on my name and we set up a schedule as to when I was to transfer funds from her home account to her overseas one. She bumped up one of those scheduled transfers to make sure she had enough funds while on a sight-seeing trip.
But it was her money that I was sending in the first place.
Evening News reporter Paula Wethington hosts the Monroe on a Budget blog. For more money-saving tips, go to monroeonabudget.com.
Sidebar: Financial items to discuss
Here are some budget line items that young adults and their parents will want to discuss:
- Airline fares.
- Bank fees.
- Birthday and Christmas gifts.
- Bus fares.
- Cable or satellite TV.
- Car expenses such as payment, gas, registration fees, insurance and parking passes.
- Clothing and shoes. Remember that college students are likely to need business attire for interviews and professional conferences.
- Computer, mobile phone and Internet connection fees.
- Income tax preparation fees and / or federal taxes due from their employment.
- Laundry. Remember that most on-campus students need to use pay-per-load laundry rooms.
- Life insurance.
- Medical bills such as health insurance premiums, deductibles and co-pays.
- Personal care items such as soap and toothpaste.
- Rent for the dorm room, on-campus apartment or independent housing. It’s also worth considering having the young adult pay rent if he or she is living at home.
- Student loan payments.
- Study abroad expenses.
- Tuition, textbooks and class fees.
- Uniforms for work, class or sports teams.
- Yearbook, team or Greek organization photos.