Finance 101: Money-Management Skills for College Students & Parents

By Bennett, Joy T. | Ebony, September 2008 | Go to article overview
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Finance 101: Money-Management Skills for College Students & Parents


Bennett, Joy T., Ebony


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Sticker shock today isn't limited to just the gas pump. The cost of college tuition is perpetually on the rise, but what about the other expenses that come with college living?

"The cost of attending college goes well beyond tuition," says Danielle M. Kennedy-Lamar, associate vice president for Florida A&M University's (FAMU) Enrollment Management. "Other costs include housing, a food plan, books, transportation and personal expenses." She adds that parents need to consider all costs when setting a budget for their son's or daughter's education and estimate the total amount you will pay for each to attend school for one year. Parents should request a cost summary from the school or check the school's Web site for up-to-date information on prices.

Students should be cautious when applying for and using credit cards. Since debt accumulated in college can haunt them for years, students should charge only when necessary and pay off the balance each month. Interest rates on credit cards are high and add up quickly. Credit is not free money, and some students don't seem to understand that fact. Do you really want to pay interest on pizza and potato chips? Using a debit card is safer for everyday expenses. Debit cards offer convenience, but a student can't overspend because purchases are limited to the amount of money in the bank account.

Preparing to pay for a college education and planning how to allocate money can be a daunting task for parents and students. Be sure to consider all factors when computing college costs:

* Tuition and fees

* Housing

* Food plan (Students can save money by sticking to their prepaid campus food plan and not eating at fast-food restaurants.)

* Books and supplies (Students can purchase used textbooks or borrow books from students who have taken the course previously.)

* Personal expenses (laundry, medical, disability expenses)

* Transportation

* Cell phone plan

* Long distance phone card

* Experienced parents of college students also advise opening a joint checking account in the area where the college is located. Many banks offer free or low-fee checking for students.

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Finance 101: Money-Management Skills for College Students & Parents
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