Should You Give Your College Freshman an Allowance?
It’s that time of year. Summer is coming to a close and that moment you have been waiting (or dreading) all season has arrived. Your baby is finally headed off to college. And while this new chapter in life is exciting for everyone, you might be asking yourself, “What is a reasonable allowance for a college student?”
Okay, maybe it’s not the first question you are asking yourself, but it’s a fair question that can run through parents’ minds. How will your child financially survive their first year of college? Will they have enough to enjoy the college experience?
The College Board reports tuition and fees for undergraduates attending an in-state, four-year college is a staggering $10,230 per year . And that’s not including room and board. Once you and your child get the cost of tuition taken care of, is there room for a college allowance?
Of course, each family arrangement is different. A weekly allowance for a college student depends on your own situation and where they attend school. Cost of living can vary, for instance, whether your child is attending a university in a small town or big city.
While it may be easy for your first-year child to spend their college allowance on fifty-cent tacos in a small college town, they could be facing bigger money challenges in a high cost of living area.
Take a look at some pros and cons of giving your kid an allowance while in college. Expenses outside of tuition can vary, so only you can determine what you can cover or if you want to give your child financial wings their first year in school.
What Expenses College Students Need to Cover
First, you can start by looking at what expenses students need to cover while in college. Aside from room and board, they’ll likely also need money to purchase books, school supplies, and potentially a meal plan if they choose to do so.
And don’t forget about college sports. Optional athletic tickets, entertainment, and sorority or fraternity life all come with a price tag. You and your college student may need to factor in these costs and how to cover them.
Clothes, food, toiletries, cleaning supplies, and car maintenance and fuel are other day-to-day expenses your student may need to cover. At this point, you might be pushing your college goer to find easy ways to make money in college. Or you might be feeling the urge to break out your wallet.
Pros: an Allowance Could Provide More Freedom in College
Stocking your child’s bank account might provide some benefit. A college allowance could help your student stay focused on their studies. The pressure is off for finding a part-time job and trying to make ends meet.
They could have more time to hoof over to the library and pick up one-on-one meetings with their professors. And who knows, their chances of making the Dean’s list could get a whole lot easier with more dedicated study time.
A weekly allowance could allow for more extracurricular activities, too. Instead of spending after-hours working, your child could become involved in campus clubs and organizations.
Rather than trying to earn an income, they could carry out philanthropic work through a sorority or fraternity. They might even choose to join a club. The choices are endless and can add to a student’s resume.
With a monthly or weekly college allowance, you might be able to reduce money stress for your child. If you want them to enjoy their collegiate years without the responsibility of earning an income, an allowance could be beneficial.
Cons: an Allowance Could Weaken Financial Responsibility
Then there’s the other side of the college coin. Say you decide to transfer money into your child’s bank account each month. They might use the money to spend copious amounts on fast food and unnecessary Target runs.
Without factoring in other mandatory living expenses, like groceries or utility bills, the allowance may burn a hole in your college freshman’s jeans.
Allowances don’t necessarily add up to a financially savvy college freshman, either. A money supply from mom and dad might create weak money management skills. Your child could take advantage of this perk, and come running back to you when the allowance doesn’t last the entire month.
Consequently, your child might not feel like getting a job is a big deal. Jobless students may not gain valuable employment experience. In fact, a 2008 study from the Bureau of Labor Statistics (the latest study from the BLS available) found “positive effects of student employment on future labor market outcomes such as future wages, fringe benefits, occupational status, and likelihood of employment.”
What Happens If You Don’t Give Your Child an Allowance in College
If you decide to not give in to a college allowance, there could be an upside. In the same Bureau of Labor Statistics report , four-year college students who held a part-time job of 20 hours or less had a slightly higher GPA than students who did not work.
This could be because these students learn better time management skills. Students who can juggle being a full-time student, doing extracurricular activities, and having a part-time job might be able to enter the workforce more prepared.
Eventually, your baby will become a full-fledged adult. They may stumble financially during their first year in college. Though they may flounder, not giving your child an allowance in college may not be a bad thing. With time, you might see your child seize the opportunity to stand on their own.
Students in participating schools can apply for federal work-study programs on campus. Plus, there are usually part-time jobs available both on and off campus. If working through the school year is too much for your child to handle, they can opt for summertime gigs. With proper savings skills, your child could help finance their college experience with money made in the summer.
Budgeting for What Works Best for You
In the end, you’ll decide to budget for what works best for you. Every family’s situation is unique. Some families might not be able to afford to give their college student an allowance. While other families might set aside extra cash to help out on a monthly basis.
If you decide to bankroll your college freshman, try not to micromanage their finances. As a budding adult, financial mistakes can be made. Here are two ideas you can use to guide them:
Helping them learn money management skills through budgeting. You can help your college freshmen keep track of their income and expenses on a monthly basis. Accountability may help them see where they can save and spend their money responsibly.
Being honest about how you would like to share or not share financial responsibility with your college freshman once they get to campus. A money conversation with your child can be awkward if you have never broached the subject before. Transparency could help you manage expectations. Together, you could find ways to help make college more affordable to lessen the financial burden.
In the spirit of complete transparency, we believe you should exhaust all your federal loan options before considering SoFi as your private lender. But if federal student aid has come up short and you’re looking for other ways to afford college, you could consider a private student loan from SoFi. There are no fees or fuss, and you can choose from low fixed or variable rate loans.
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