I was listening to NPR one morning last week and they were discussing the hidden costs of college. Unfortunately, in the US, college is prohibitively expensive. Well, except for the whole “don’t worry, you can pay for everything in loans!” thing, which sounds much better when you’re a freshman than when you’re in your 30’s with no end to your bills in sight. In addition to tuition, there are books, housing, medical insurance, meal plans, and Starbucks.
*record scratch noise* Starbucks??
The author includes this bit about how much to budget for your child’s monthly fancy coffee budget:
Another big item on the NRF survey: food. Your options? A meal plan versus the grocery store around the corner. Don’t forget fast food and late night snacks. And if your child is anywhere near a Starbucks, we’re talking about $120 a month for venti skim lattes and caramel macchiatos.
Starbucks is not a requirement for college, and I know this is a radical idea, but instead of loading your kid’s debit card with money, maybe that’s one expense she can take on herself. Or maybe she can learn how to make her own coffee drinks (which is possible, even in a dorm room).
When I was first starting out as a college student, I learned fiscal responsibility the hard way—from spending all of my money at Starbucks and getting overdraft fees. Only after I looked at my bank statement did I realize that $3 Frappuccinos every morning really added up!
And alcohol. Yes, your child will drink and yes, that money you put into your kid’s debit card every other week is paying for it.
I think if your kid is old enough to buy alcohol, they’re old enough to pay for it themselves. I know your kid’s social life will suffer if they can’t buy as much booze and expensive coffee as they want, but they’ll get over it. Or they’ll get a job and come to appreciate the cost of these luxuries. Or maybe they’ll make up a batch of their own fermented drink (bonus science lesson!).
Next, housing. Living on campus versus off is a big decision. Not having your child live in a dorm could save you up to $20,000 over the four years. On the other hand, your daughter could end up sharing a dumpy apartment or group home with a bunch of people who skip out on the rent or utilities. You get the picture.
The horror! Your child could end up in living in a dumpy apartment, like the rest of the poors!
I lived in a lot of apartments and dorms when I was in college. Usually, the apartments were much safer and cleaner than the dorms, and not because I necessarily lived in nice apartments. I’ve had slumlords, I’ve had raccoons break into my kitchen, I’ve had a landlord who ripped out our bathroom (for a “one week” renovation that turned into two months), I’ve dealt with almost every kind of nightmare roommate one can have, I’ve lived in a neighborhood where I walked around with a giant metal flashlight just in case I ran across the local burglar after dark. Luckily, I walked away from those situations unscathed. And my parents would have freaked if they knew what went on at the places I lived—but that was the thing, I got to live my own life and make my own decisions. Because I lived in those places, I knew what to look for in future apartments, I educated myself in tenants’ rights, and I got a lot of invaluable experience in dealing with difficult people. (Not that living unsafely is something that people should strive for but I’m trying to take the silver lining here.)
At one point, during college (in 2005), my food budget (after rent, gas, and bills) was $20 per week. I learned a lot about how to eat cheaply, how to save money by cooking my own food, and how to stretch a food budget to its limits. Up until that point, I had lived a middle class life, and getting by with barely any money taught me an important lesson and is something I value to this day.
If the worst that happens to your kid is that they live in an apartment where people aren’t paying utilities, consider it an invaluable life lesson in how to cope with bad roommates (and possibly bad landlords).
Our daughter, Bianca, of course insisted that her perfectly good laptop from high school was too old and too slow. The one we bought her for her freshman year set us back about $800. Then there was her smartphone, which might as well be another appendage. Count on an initial cost of $200 plus an $80 monthly fee. Even the cheapest plans these days cost about $1,000 a year.
If your daughter’s “perfectly good laptop” isn’t good enough for her, maybe she should get a job and buy one herself. Or, learn how to build a desktop (which is not very expensive), use the old laptop as a monitor, and take a pen and a notebook to class! Even though smartphones are expensive, there are plenty of good phones that retail for less than $100. And I don’t know about you, but I use a Cricket Wireless plan, which is contract-free and only costs me $70/month (for 2 phones) for unlimited calls/texts and a couple of gigs of data. And since she’s living on campus, she may have wifi access, so she won’t use up that much data. (And Cricket doesn’t have data-overage charges—if you go over your data, they just throttle the speed, so you can still read your emails and such without much issue.) (I swear, I’m not a Cricket representative, haha.)
Call me in a year or two when my daughter is out in the real world. Right now, I’m still a few hundred dollars short and school is just days away.
Your daughter is already in the real world! This is a great time for her to get life experience and start living on her own, before she needs to get ready for a career. And if you’re still a few hundred dollars short, please consider cutting your Starbucks budget.
I’m not saying you shouldn’t ever give your kids money in college. Being able to get out and enjoy a treat for yourself is healthy. And not everybody has the time to get a part-time job. But learning how to manage your own finances, how to bargain hunt at the grocery store, how to live frugally–those are all valuable lessons that can’t just be taught, they have to be lived. Sometimes, it’s hard for parents to let their kids learn difficult lessons, but it’s necessary. I wouldn’t be the person I am today if I hadn’t lived through some difficult situations in college.
If you learned how to budget the hard way, or if your parents taught you how to be frugal, leave your story and your favorite resource in the comments!