Scotia Investments

Financial Learning Centre

Scotia Investments Financial Learning Centre

Money Management Guide - Sending Your Child Off To College

In sending your kids off to college, you are allowing them to be responsible for a larger amount of money than they're accustomed to. Their needs and wants have grown at this point, as well as the pressure they feel to fit into certain social groups. At this stage, parents and their kids tend to argue a lot when a request for getting money is not granted.

College expenses, at this time, should be well thought through. Decide what expenses are 'fixed' and which ones are 'flexible'. Aim to pre-pay the 'fixed' ones and budget wisely for the ones that are 'flexible; developing the right spending habit.

Here are a few ways that will help both parents and children to be wise about money matters


In the first week of college, tell your kids to make notes on everything money is spent on. At the end of the period, let them review it and see what they could have done without. For instance, convenience spending like taking cabs everywhere, eating take-out food, dry-cleaning expenses, or even purchasing a book they'll never read, could be controlled the next time around. Of all their spending, see what gave them satisfaction, and what a waste of money was. Let them cut the 'wastes' and have more money available to them.

Credit versus Debit

It is advisable to give your child a Debit card instead of a Credit card. This way, you'you'll be able to monitor their spending to an extent, obviously seeing that they're limited by the amount of cash in the account. It is enough to worry about possible problems at this stage of their life; e.g. drinking, smoking or excessive partying, more than having to deal with their burying themselves in debt as well. It's as they say, graduating from college with student loans means you've made an investment in your future. Graduating with credit-card debt means you're throwing your future down the drain

Part-time job

Let them get a part-time job. This is usually a good idea to rake in the extra cash to use on whatever venture a parent doesn't deem necessary, or better yet, add to their savings. It would be even more beneficial if the job chosen is in the field of their future career; work experience in one's field is always good.

Cost-cutting ventures

Buy enough phone cards to last a month, based on what you see as a good budget for phone expenditure. Let them cook sometimes, instead of ordering out. If you're getting an apartment for your child, consider a roommate to share the rent and utility expenses. Don't buy them a whole new wardrobe for college, let them take the clothes they already have; however it's alright to let them have a few new items. This will allow them to have more money for more important things.

As parents, it should be understood that the budget for high school to the sixth form period, would be much less than that for the tertiary level. Students will have more responsibilities and a greater need for money. Therefore, a proper budget cannot be constructed until the student has spent a good month at the institution, where expenses can be properly analyzed.

Fewer arguments between parent and child will ensue if expenses are properly considered. Their employing a good spending habit paves the way for saving. This will allow them to have access to more cash, which would also lead to fewer arguments about money. So employ these tips, and when your child has saved a sufficient amount of money, feel free to introduce them to the idea of investing for their future.