I am opening a checking account with one of my kids tomorrow. It’s an historic event. Soon small boxes of checks will arrive, in anticipation of careful spending.  My daughter has had a savings account but never a Visa card, nor a checking account.  She is walking toward adulthood, armed with fiscal consciousness. As a parent, I don’t take any of these milestones as small. 

It seems like only yesterday she was a tiny baby looking adoringly at mom as the answer to all her needs. Then she morphed into a Middle School alien who glared at me under a fringe of bangs as the source of the entire world’s frustrations. (At least I thought she was glaring. In those years it was difficult to see her eyes due to the fringe).  My daughter has grown into a young woman, leaving both dependence and the hostile fringe behind.

As parents we want so much for our children.  We hope for them to be intelligent, talented, of good character, etc. And we invest effort teaching, educating and praying the adolescent glaring ceases and they evolve into responsible adults. One area not to forget imparting is fiscal awareness.

Here are some ways to implement financial readiness in our teens:

As young as possible, open a savings account for them. Have them learn the process of savings early.  Some may argue with me on this, but don’t let kids keep all their birthday/holiday money for splurges. Even if it’s five percent of the till, they should deposit something in savings. If you start young, kids are less likely to buck the system.

When they get a job, negotiate with teens a fair amount to keep for spending and have them deposit the rest in their savings account.  

Agree in advance on what the savings account is to be used for. I personally do not agree that kids should only save or only spend all they earn. We adults have fun and we buy gifts for others.  College savings can seem far off to kids if they don’t get to take some earnings out now and then. Budget with kids either monthly or seasonally what is fair to withdraw and why.  

One of my friend’s kids withdrew all of her savings to buy a boyfriend an X-Box and games. If you fear the same, open an account that requires both of your signatures to withdraw money. I have never had to do this my kids, but it’s a factor to consider.

Open a checking account and obtain a debit Visa or Mastercard and possibly a credit card before they leave home. A checking account is tantalizing for us all. It’s tempting to over spend. Thus, I attempt this stunt with my kids pre-leaving the nest in order to employ corrective measures.

Things to educate the kids about checking accounts:

• Teach them to shop banks (fees, interest rates, minimum balance, ATM charges)
• Balancing checking accounts
• Disputing fees/Identity theft
• Maintaining records of transactions and statements
• Secure disposal of receipts and documents
• Online banking and setting up an online account

While some of those items may seem common sense, having a few kids in dire predicaments has taught me to leave no stone unturned.  One of my offspring, upon entering college, switched banks only to be dinged heavily by charges for ordering checks, not maintaining a minimum balance, and excessive use of ATM card.  I received an “SOS” text from him one night when he’d involuntarily overdrawn himself.

The bank I had set him up with before he left home had low fees, no check printing charges and a minimum balance of only five bucks. He didn’t ask the right questions of his new bank and paid heavily. I take some responsibility for that, as I didn’t educate the boy on banking as I should have.  He is not a detail conscious personality, and did not ask any questions. The paperwork the bank gave him came up mysteriously missing, lost before he could read it.  (I suspect these documents ended up in the bowels of his dorm room, which is a NASA recognized Black Hole.)

Therefore, take a few minutes and teach your kids banking. Start young, be flexible with savings, but consistent, and give your kids the gift of responsibility that carries into adulthood.

A wise woman recently said to me, “We are not raising children. We are raising adults.” Words to live by when it comes to smart financial parenting.

August looms a mere eight weeks away, bringing with it the giant sucking sound of your cash being drained away as your child leaves for college. Maybe you have a high school student with college aspirations and want to start saving. How much do you budget? A touch of preparation saves a ton of dough and much Zanax, folks- trust this mother of five.  What are these costs?

Almost all parents with college bound kiddos can quote tuition fees, (around 15K annual room and board & tuition for state schools). I, too, knew these statistics, but breathed a heavy sigh of relief when there were ample grants, scholarships, and student loans to get my child’s foot in the door of the University of her choice. Whew! That fiscal hurdle was crossed.  I thought. I mean, the tuition covers room and board, how much more could they need, right?

That was about six years ago. I am far smarter these days, having three children with college experiences.

For starters, let’s talk getting them there. Pre-college there are SAT’s, which many students take two or more times and keep their best score.  You can plan on spending about $30-$50.00 each for these.

Application Fees: Applying for colleges takes in many cases, non-refundable application costs, which can range from $25-$200.00 or more, depending on the school.  Most kids apply for four or more schools.

 Then the “Letter of Acceptance “comes. This is the day you celebrate with joy, (and you should, because it is quickly followed by several other letters asking for fees, one upon the other). 

Yet More Fees: There will most likely be a student fee and a housing fee. Countless letters will ask for cash in a myriad of ways, some required, some merely sales pitches. There will be an orientation, which is typically mandatory for freshmen and usually comes with a price.  And F.Y.I, even if your son or daughter are on a full grant or scholarship, these upfront fees may not apply to the “free ride” and most often are still out of pocket.

Crazy Mandatory Fees: This week, I took child number three to Ball State University for her mandatory orientation. After coughing up something like $225.00 already to BSU for above costs, I become very crabby over additional fees. I know that an education is worth every penny, I just hate parting with yet more of my money.  It’s primeval in me, I know. I become ugly.

At this recent event, the required cost of eating there was around fifty bucks for a day and a half (two lunches, one dinner, and a breakfast). Granted it was for my daughter and I, but still this is for a family of people who eat a yogurt and a granola bar for breakfast and consume ramen noodles as a staple food group. We’re cheap.

Me: What if I don’t eat that much? Do I get a rebate?

Orientation Leader:  You will find that money will go quickly, given the cost of our food.

Me: If it’s expensive, I would be happy to look at ways to reduce your budget, I do that for a living.

Orientation Leader:  Umm.

Me: Hey, I am on a restricted diet.

Orientation Leader: We have a variety of ways to suit your diet. What are your restrictions?

Me: My daughter and I only eat things that cost a dollar, it’s genetic.

Orientation Leader: That will be $50.00. We take cash, check or credit card.

If you stay with your kiddo at these orientation gatherings, you will most likely be charged a fee to sleep in an un-air conditioned dorm, where you will make your own bed and sleep on a rubber mattress coated with the DNA of countless college students.  This is not to mention the cost of road trips to drive there.  (Nor the parking costs often charged to park while paying for the orientation experience).

Then there are lab fees, student parking passes, etc.  Health exams, vaccinations, sports fees. You are also “encouraged” to visit the bookstore, where fifty dollar sweat shirts beg to be purchased.

What I suggest to counter these unexpected fiscal gems is to be aware in advance and to start saving if you have a high school student. I anticipate spending from high school senior year to college entry around $500.00, for SAT’s, applying to colleges and required entry fees.

Then I plan on another $200.00-$300.00 for added costs, such as orientations, fuel to get there, student ID’s, parking passes for students, and up front lab fees.

Also, a rule of thumb regarding books and financial aid- typically financial aid is not released to the school until a few weeks after the semester starts, so plan on having cash to buy books each semester. This is around $300.00- $500.00. I have never lucked out paying less, given a combined eight years of college for my kids thus far.

If you know there are a couple of colleges your kiddo is aiming toward, try contacting the schools and ask for these costs. Or search websites for info.  Bottom line:my budget just to get the critters off to college- $1,300.00 (without dorm expense).  You may adjust yours as needed.

Got a college student? I would love to have your input on budgeting!

Next blog stop on the money train, “Dorm-land”.