- The Washington Times - Monday, August 10, 2009

Rob Barnes’ penchant for buying T-shirts and hoodies got the “clothing” category bumped from his parents’ side of the college spending ledger to his own.

It may not be the sort of thing most people would think to figure into a college budget plan, but Mr. Barnes’ T-shirt habit is representative of the spending choices that crop up as a student settles in to life on campus. From pizza runs to dorm-room decorations, Greek Week festivities to football games, the list of temptations for a student’s dollar is practically endless.

“I have been amazed with how fast the $10, $15 and $20 charges seem to add up,” said Mr. Barnes, who is about to enter his junior year as an English major at Colby-Sawyer College in New London, N.H.

Preparing college-bound students for the numerous financial decisions they’ll have to make is an important step in getting them ready for school. Skip over addressing the issue of making responsible spending choices, and parents might find themselves receiving a steady stream of “Send more money!!!” text messages.

A frank conversation about how much money is available and who will pay for what can be seen as “the equivalent of giving them the last financial inoculation before they go into the real world,” said Jason Alderman, director of financial education for Visa Inc. “Setting that expectation that there will be a budget is really important to do before your kid goes to college.”

One issue that makes such planning especially difficult is that young people are notoriously unprepared to deal with financial issues.

“These are skills that need to be taught. We don’t learn this by osmosis,” said Leslie E. Linfield, executive director of the Institute for Financial Literacy in Portland, Maine. “We don’t automatically know how to use a debit card, how to use a credit card, how to manage cash.”

A few weeks before they’re due to report to classes may not be enough time to fully prepare students for the realities of the hundreds of financial decisions they’re about to make. But Ms. Linfield said parents can give their children a crash course in money management. “Mom and Dad should be sitting at the kitchen table with them and talking,” she said.

The conversation should include making a list of the types of spending that students will face and specifying who is going to cover what costs. Beyond tuition, school fees, books and housing, decisions must be made about necessities like food and transportation. Does it make sense for your child to take part in a campus meal plan, or would cooking be a better choice? Should your son or daughter have a car on campus — and risk parking tickets and emergency repairs along with facing high gas prices? Or will public transportation suffice?

After the necessities are addressed, consider discretionary spending.

Joining a fraternity or sorority is an option at many schools, but it can come with a hefty price tag: up to $1,000 or more to pledge with some Greek organizations, plus ongoing dues and the costs of activities. Costs to cover equipment, travel and other aspects of taking part in athletics can also mount.

Most campuses also offer dozens, sometimes hundreds of clubs. While many can be free to join, activities may also give rise to additional costs.

Finally, whether your child attends a top-ranked party school or a quiet campus, there are always opportunities to spend money on fun. Costs here can again span a wide range — a night on the town near a Big 10 campus in the Midwest, for instance, will set a student back by a far smaller amount than a similar night near an urban school in a major city.

A plan’s first draft might have to be adjusted as spending patterns emerge.

Mr. Barnes’ parents, Barbara Heffner and Carl Barnes, initially covered his clothing expenses, for instance. But they became less willing to do so as the T-shirt collection grew — he’s got about 150, although he notes that some were free. “It wasn’t that there was a credit card bill where there was $50 worth of T-shirts,” Ms. Heffner said. “It was the accumulation.”

According to student loan company Sallie Mae, freshmen with credit cards end their first year of school with an average balance of $1,500. Credit cards can, however, be used to help parents and students keep track of where the money goes, particularly if the bills are sent back home.

Mr. Barnes tends to use his credit card for almost all his spending, even small purchases. His parents said they opened a joint account before he went to school and agreed on who would be responsible for what types of spending. In general, his parents cover food — even pizza runs — books and costs related to his participation on the tennis team. He’s responsible for his car, entertainment and, now, most clothing.

Mr. Barnes, who doesn’t have a set budget, spends more than $200 per month. Ms. Heffner goes through each credit card bill to divvy up the charges.

And there are sometimes hard decisions to make, like who pays the tab for things like pricey, unexpected car repairs. “Those are the tough conversations,” she said. “Obviously in order to have a car, that requires that he spend less money in other areas, which he doesn’t always bear in mind.”

To cover his share of expenses, Mr. Barnes works part-time at an REI sporting goods store near their Wayland, Mass., home during summers and school breaks, but he doesn’t hold a job during the semester.

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