Just when you thought the college planning was over

The good news:  the kids are off to college & they’re fiscal adults for the first time

– The bad news:  the kids are off to college…

You’ve spent years preparing for this moment.  Maybe you’re saying good-bye at the curb, maybe it’s in front of the dorm, 1,000 miles away.  You saved to fund the tuition; you did the college visit trip(s), assisted with endless college and financial aid applications and essays.  Now they’re beginning the transition into adulthood.  Most likely, this is their first opportunity to manage their own expenses. 

Hopefully you’ve instilled good values about money and educated them on budgeting.  You probably thought your job was done.  I would like to alert you to a few additional cautions specific to this otherwise happy time in the lives of both parents and children:

  • Health Insurance – Be aware that your employer’s plan does not have to extend coverage for your dependent until next year.  If they do, make sure that you understand what coverage is available out of network.  College and university student insurance plans may be mandatory, without an executed waiver. Be aware that the student plans may be a poor value that waive pre-existing conditions, offer little coverage for prescriptions, and have a low maximum coverage benefit.
  • Auto Insurance – If your student leaves his or her car at home and goes to school 100 miles away, you may be able to reduce the premium on your auto insurance.  If your student takes the car away to school there may be a savings in a stand-alone policy, depending upon the location.
  • Student Identification and Debit Cards – It’s a crazy time for the banking industry, and we’re seeing all kinds of changes in interest rates and fees.  You need to decide how to transfer cash and if your student gets a credit card, whether that card will be tied to your personal account.  Whether or not you tie the cards to accounts you can manage, you should have discussions about the ramifications of overdrafts and how you will handle running out of cash.  You should have the same frank discussion about the responsible use of credit cards. 
  • Textbook and Ways to Save – You can rent text books and get textbooks in a digital format and save big!
  • Need for a Health Care Power of Attorney – Your student is now an adult with his or her own privacy to protect.  In case of an emergency, students should have a prepared a health care power of attorney as well as a HIPPA release.

In no way is this list complete, but it hits the highlights of a great article that I read in the Wall Street Journal, 8/14/2010, “Packing for College, 2010 Style.”http://online.wsj.com/article/SB10001424052748703723504575425550070056066.html?KEYWORDS=Packing+for+College+2010+Style

If your students could do some extra studying on the subject of budgeting,  have them email me for a straight-forward budget template. You could also  forward them my budgeting blog,www.financialplanningfocus.com/blog.