26 Jul How do I set a budget for my new college student?
Q. My son starts college in September. How do we set a reasonable budget?
A. Congratulations. This is an exciting time for your family.
Setting a budget for a college student is like setting one for yourself.
Your son will need to consider what income there is — whether from a part-time job, scholarships, a savings account or from an allowance you give, for example.
Then he needs to consider his expenses, whether for textbooks or pizza and beer.
There is no one-size-fits-all budget that works for all students, and especially in the beginning, you should plan to be flexible and make some changes on the fly.
The college’s website will give an idea of some costs, but others are more lifestyle-related, so it will depend largely on your son. And whatever his lifestyle, he will need to let the available income drive his spending.
Consider a 50/30/20 budget as a rule of thumb.
Fifty percent of the income would go to needs, such as tuition, room and board and books. Thirty percent would be for wants such as dining out, clothes or sporting events. The remaining 20% would be for savings, including for an emergency fund or a spring break vacation.
Then after a month or so, you should sit down together and review how it’s going, and then make adjustments if needed.
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This story was originally published on July 26, 2023.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.