The day has finally arrived! Your baby is all packed up with her new laptop, IKEA comforter and every dorm-friendly accessory she could need. As you drop her off and say your final goodbye, you can’t help but hand her a last present: an envelope with $100 cash. From here on out, she’s on her own.
Well, for the most part.
Many parents are unsure where to “draw the line” in order to help their child learn how to be independent and self-sufficient in regards to finances. While you want your child to learn how to budget, there are a few things you should continue to pay for while your student is working hard to get through school without starving.
- Car Insurance
If your child is bringing a car with them to school, it is best to keep them on your insurance. Not only does this save money for you, but it gives your student peace of mind while maneuvering around a new town. We suggest one condition: As long as your child keeps their grades above the “Good student GPA,” you will continue to pay for their insurance. If they go below that GPA and lose the discount, they’re on their own.
- Mobile Phone
More than likely your child’s phone is already part of a family plan you have created. Attaching his line to yours is much cheaper than him buying an individual line. Plus, you’re already used to budgeting your current phone bill each month so this shouldn’t cost any extra money.
- Medical Insurance
Children are allowed, and encouraged, to stay on their parent’s insurance until age 26. While it may be an extra expense each month, it is much cheaper than the alternative: school health insurance. Some schools may claim to offer a comprehensive and “budget-friendly” cost to students, but in the end, whatever insurance you currently have will allow them more freedom than only receiving care from the school’s approved doctors and services.
- Interest on Student Loans
Many student loans currently offer the chance to pay on the interest while the student is still attending school. Paying the interest on unsubsidized loans each month will save you hundreds, if not thousands of dollars in the long run. You can check out online calculators to see how much money you and your child could save by making interest-only payments while still in school.
- Future Tuition Costs
As we already know, college is extremely expensive and costs continue to increase each year. Instead of being faced with a large bill every September, we recommend setting aside an amount each month that you can contribute to your child’s education throughout the year. This way when September does roll around, you can pay a little bit more than you did the previous year thanks to savings you’ve been adding to the past few months.
These are just a few tips that we believe will help your child succeed while taking the first steps into adulthood as a college student in the classroom or obtaining UAB’s online marketing degree. Trust us, they will definitely thank you for it later!