Budgeting for Students

ONE extracurricular activity that every student should master when heading off to college is personal money management. But a student's day to day spending is typically as ad lib and unbuttoned as a fraternity beer blast. That does not mean you cannot keep your undergraduate from overspending.

During a school year, the average college student will lay out about $2,130 for books, other supplies, transportation and personal expenses at a state university. There is plenty of room for economizing, and the first place to look is at food and phones. Two surveys have illustrated that point. At Penn State, boarding students forked out an extra $415 a year for all those 2 a.m. pizzas and their accompaniments. And at the University of Connecticut, students spent more than $50 a month each on long distance phone calls.

While many students seem to think that it costs less to live off campus than in a dorm, they may be wrong. In college towns with a lot of demand for off campus housing, accommodations within walking distance of campus tend to be expensive. Of course, off campus students can save money by sharing housing and doing their own cooking. If landlords demand a one year lease, students should hold out for subleasing privileges.

Fraternity living is back in style on many campuses, and it is costly. Dues range from roughly $12.50 to $50 a month, plus another $60 to $200 or more a month for room and board. Onetime initiation fees add another $195 to $4 10, and once your child joins, there is a certain social pressure to do things with friends that usually involve spending money.

Most parents have to send money at one time or other. But doling out funds regularly by the week or month may tend to foster an unhealthy dependence. Instead, try giving your undergraduate a lump sum each semester and make it clear that the money will have to last. If you give your child spending money, be certain to sit down and discuss your mutual expectations. To avoid unnecessary strife, you need to know the student's assumptions about spending. And the student, in turn, should know when a check is coming, its amount and any rules about its use.

Whether students rely on parental subsidy, use their own money, or both, most have their own savings and checking accounts. Unhappily, few seem to know or care enough about how they work.

Many undergraduates keep their checking accounts in their home towns. But long distance management of financial affairs is hard. For instance, it is tough to verify your balance quickly if you use an out of state bank. So it is a good idea to have an account on campus.

Some people strike a compromise by maintaining a checking account at school and a savings account at home. That can encourage self discipline by making it difficult to dip into savings. Keeping a savings account far away is especially helpful for students who are tempted by automatic teller machines that make cash available at any hour, day or night.

Although some parents feel that a credit card might wrongly cushion a student who manages his or her affairs badly, others find that the piece of plastic can provide a good back up for college kids. It helps with car rentals, plane fares and railroad tickets. Trying to get money to college age students in various locations can be frustrating. And it's often impossible for people of any age to cash personal checks away from home. Most parents who give their college age children credit cards do so strictly for use in emergencies and they expect repayment.

Undergraduates who want to establish their own credit identity can open a charge account at a local store.

Ideally, college students should take full charge of a semester's spending. If the first semester seems too soon, put it off until the next term. But the parents' lives will not get any easier until the student runs his or her own finances.