If your son or daughter is attending college this fall, it's time to set some ground rules to keep their spending in check. Stephanie AuWerter, Editor of SmartMoney.com, has some tips for making a budget.
Setting up a college budget can be tricky. Depending on the location of your son or daughter's school, everyday items like laundry detergent or bottled water may cost a lot more than they do at home. Those costs can add up. "Start with the school financial aid office," says AuWerter. "They should be able to give you some guidance."
Don't underestimate the power of communication, though. Be sure to sit down with your son or daughter and discuss what your expectations are. Agree on a budget and stick to it.
If you're looking to save money, now is also a great time to review any existing insurance policies. "If your child is going to a school that is more than 100 miles away and they're not taking a car with them, call up your auto insurance company. You may be eligable for a discount," says AuWerter.
Don't forget your homeowner's insurance, too. If your son or daughter will be rooming in a school dorm, you want to make sure their possessions are covered. Or, if they're staying in an off-campus apartment, look into a renter's insurance policy to protect their belongings.
Also, be sure to discuss identity theft. Buy your child a paper shredder for their room and stress the importance of shredding documents that contain personal information. Be sure your child doesn't list their social security number on school ID's or other documents unless absolutely necessary.
Many parents also want to get their child a credit card before they go away to school. Credit cards are great things to have in case of emergency. However, 15% of college students have four or more credit cards. Getting into severe credit card debt early in life can wreak havoc on your son or daughter's credit.
Sit down with your child and help them find a card with a good interest rate and a good rewards program - not a card that offers a free tote bag once you sign up. "Credit card companies really like college students. They target them..." says AuWerter.
However, just because they found a great deal doesn't mean you should co-sign their card. "You may think that your 18 year-old is the most responsible kid around, but you don't want your credit report tied to a college student," says AuWerter. "If they're late on the bills, it could hurt your credit history."
For more information on college financial planning, as well as additional personal financial advice, click here to visit www.SmartMoney.com.
By Erin Petrun
Copyright 2008 CBS. All rights reserved.