CHAMPAIGN, Ill. (WCIA) — Before you know it college students will be heading back to school for the fall semester. Kathy Sweedler has some tips for managing those college costs in today’s Your Money.
Why talk about money?
Talking about money can be really hard. However, misunderstandings about financial expectations can lead to conflicts – it’s better to talk be clear before students start college.
What topics might families want to discuss?
1) Who is expected to pay for which expenses? Different families have different expectations about college expenses – what’s your family’s plan? Will the parent keep paying for items they paid for before, for example: clothing, toiletries, auto insurance? Or is now the young adults responsibility? And, what about new expenses like textbooks?
2) What strategies can be used by the student to keep living expenses low? For fall 2019, UIUC estimated costs for an undergraduate show living costs (housing, food, etc.) to be very close to the cost of tuition. Students can manage their living costs to save money.
What else might families want to discuss?
Talk about how you feel about borrowing money. Is it something to avoid or do you see it as a financial tool? And, in what situations?
You may also want to discuss interest rates and how the Annual Percentage Rate tells us how expensive a loan is. For example, a student loan may have an interest rate of 6%, a credit card – 18%, and a payday loan, up to 99%. A vehicle title loan may be even higher, for example, 265%. If your student feels like they need to borrow more money during the year, what would you like them to do?
For more information about managing expenses while in college, visit U of I Extension’s Financial Wellness for College Students website at http://go.illinois.edu/financialwellness