A BU Guide for Parents: How to Help Students Manage Their Money

Bedding? Check. Room-cleaning supplies? Check. Desk lamp and bulbs? Check. Credit card?

Perhaps priming your new college student with their own plastic didn't occur to you as they were getting ready to leave home. But it's actually a good step in preparing them for financial independence-not just for the next four years, but for a lifetime, says Rebecca L. Cassely, director of Boston University's Financial Assistance office.

Whether it's budgeting for a bite with friends or avoiding bankruptcy while purchasing coffee for those late- or all-night study sessions, Cassely has suggestions for ways parents can support their student in money management.

If students get their first credit card after college, you and they may have waited too long.

"Credit is something that takes time to develop," Cassely says, "and often, once you need it, it's too late to build it. Most often this comes when you go to rent your first apartment or lease/buy your first car." The best time to build your credit history for those life needs is during your college years.

"The primary way students do this is through federal direct loan borrowing. The second is through a credit card, which can have a very low limit. Put a monthly subscription on it or make one charge per month, and don't carry a balance. Pay it off in full each month, on time." This strategy, Cassely says, checks three boxes for students' future credit: "on-time payment history, length of credit history, and low utilization rate." Over time, she tells students, you "can increase your credit, which will also help show you have higher available credit."

Consider smartphone apps and other ways your student can track their spending.

"The first step to saving," Cassely says, "is to know what you are spending. The little expenses add up fast, and knowing where your money is going can help you direct it to where you want it to go.

"When students start earning spending money through on-campus jobs, they gain more than just a paycheck-they begin building real-life skills like budgeting, saving, and setting priorities. As a parent or supporter, you can help by encouraging simple habits like tracking their take-home pay, setting aside a small amount from each paycheck, and thinking about purchases in terms of time worked. Tools like banking apps and student discounts make it easier to stretch their earnings."

That said, don't do a financial version of helicopter parenting. "Give them room to make thoughtful choices," she says, "even if that means spending on things they may not need, but that matter to them. With your support, they'll learn to manage their money with confidence and independence."

Agree on spending and saving expectations before the semester begins.

Cassely's tip: "Students should set a small monthly savings goal, not a large annual savings goal. You want a goal that is easy to achieve to build good savings habits. Saying you want to save $5,000 a year is not effective, because you don't see success frequently enough and it's easy to fall behind in a given month. Committing to $25 a month is a great savings goal, because it is easy to achieve-pay yourself at the beginning of the month from your on-campus job-and it reinforces success each month. Build from this starting point as you begin to feel more comfortable: can you save $50 per month?"

Boston-with so many student discount opportunities-and Boston University-with financial planning help-stand ready to help.

"Take advantage of all the financial benefits of your Terrier Card," Cassely suggests. "BU has partnerships across the city, and you can often get discounts of free admission," such as at the Museum of Fine Arts.

Her office's Smart Money 101 website, a cornucopia of personal finance webinars and tips, notes that "many cell phone carriers, gyms, banks, and other services offer discounted rates to students" as well. And "always ask for benefits offered to organizations you are involved in (including your employer)."

If a student has questions, he or she can submit them on the Financial Assistance contact page. "For general undergraduate financial aid questions, students and families can complete a Connect With Us request form," Cassely says.

Finally, if your student runs short of money and faces an emergency…

…such as needing help to buy food, there's the Dean of Students Student Support Services, which has multiple food assistance programs. It also has a Student Emergency Fund that can help with such needs as temporary housing, utility bills, medical expenses, and textbooks/classroom supplies. Student recipients must meet eligibility criteria.

Share