Money Moment: Talking to Your College Bound Student About Money

Dr. Jennifer Hunter

Welcome back to Money Moment, with Dr. Jennifer Hunter. In Episode 15, Jennifer discusses talking to your college student about money.

Do you have a son or daughter who is college-bound this fall? Before heading off to college, young adults should have a basic understanding of money management. College may be the first time that they will be responsible for managing their own money. Even if Mom and Dad are still paying the bills, they will not be around to help make every day spending decisions. Overspending and poor use of credit while in college can have lasting effects on financial success after college. Talking to your children to help them develop a plan for handling money and expenses once they get to college is very important.

In this episode, I discuss money tips to help you get your student on track financially for their college career.

Be aware of financial peer pressure

PS Productions/Photospin

Students can be tempted by credit card offers or feel peer pressure to spend more than their budget will allow. Financial peer pressure is a very real thing on a college campus.

Students, especially freshman, often feel the need to say yes to invitations to do fun things, regardless of if it fits within their budget or not. They’re still in that exploratory stage where they’re trying to make new friends and find their niche in college. Making your student aware that financial peer pressure does exist, and helping them develop some strategies for how to handle it, is a good conversation to have prior to leaving for school.

Encourage your child to establish a checking account.

Often universities are affiliated with a credit union or local bank that offers student accounts. A local bank will provide easy access to cashing checks, making deposits or ATMs. Have your child set up text and email alerts to notify them when their balances are low.

If your child has bills such as cable, internet or other utilities, stress the importance of paying the bill on time. Help your child set up on-line banking or automatic bill pay reminders to make the bill paying simpler.

Urge your child to avoid getting a credit card

Often college students, as well as parents, feel the need to get a credit card in case of emergencies or to help their student build their credit score. However, the credit card often becomes a temptation that leads to non-academic debt. I have had many conversations with graduating seniors that are trying to figure out how to manage their credit card debt. When asked why they got a credit card in the first place, their answer is normally either ‘for emergencies’ or ‘to build their credit score’. However, when they have used their credit card irresponsibly, they’ve not accomplished their goal of building their credit score. So it’s best to wait until your student is a few years older and really has a knack for how to manage their finances prior to encouraging them to get a credit card.

Help your child establish a spending plan

If your child receives a lump sum of money at the beginning of semester from scholarships or student loans, help them make a plan to stretch the money throughout the semester. We all know that this can be a difficult task. One of the best ways to develop a spending plan is to track expenses during the first few weeks of school. After the first month, review where and how money was spent.

I often give an assignment in my introductory freshman class to track all of their expenses for 7 days. It’s important to track our expenses on the weekend as well as during the week, because all of us, especially college students, spend a little differently on the weekend than they do during the week. After they track all of their expenses, I ask them categorize expenses into food, entertainment, academic related expenses, living expenses and so forth. Finally, I ask them to identify those expense categories where they feel as if they may have overspent. Then, develop a plan for the next week to get their spending more in line with their income or available money. This is a great exercise for everyone, not just college students.

Remind your child about the difference between wants and needs

Wants and needs was covered in more detail in episode number 10, but it’s not a topic that can be talked about too much. Helping your child prioritize spending based on needs such as tuition, room, board, and books before spending money on wants is a way to help them stretch their dollar throughout the semester.

Remember the 3 Rs: reduce, reuse, recycle

As you help your college-bound student prepare for classes and move into the dorms, remember that they can reduce, reuse and recycle to help them save money. Reduce the amount of stuff you buy by only buying what you need. Dorms are limited on space. Take inventory of what you currently have before shopping. Talk with roommates to divide the purchases of large items such as a microwave, mini fridge and TV. Purchase supplies that have a minimal amount of packaging to reduce waste.

Reuse items such as backpacks and binders. Look for used text books and consider renting your books online or through the university bookstore. Finally, recycle. When you do purchase items such as paper, look for the items made with recycled content.

Preparing for college is a very exciting time for both you and your student. Helping your college student prepare prior to getting on campus, especially how to manage their money and prepare their finances, will help them be a better student once they arrive.

Be sure to join us for the next episode about home emergency preparedness.

Coping with Loss, Part 2: Special Benefits for Service Members and Veterans

By Carol Church

Coping with Loss, Part 2: Special Benefits for Service Members and Veterans

In part 1 of this series, we discussed some ways to handle and reduce the often-high prices for funeral and burial services. In part 2, we’ll discuss special death-related benefits available to service members and veterans.

Dave Huss/Photospin

Burial and Funeral Benefits for Service Members Who Die During Active Duty

When a military service member dies while on active duty, it is always a devastating event. The armed services pay out a variety of death benefits to survivors in this situation, including a $100,000 death gratuity. The family will also be assigned a Casualty Assistance Officer to assist with logistics and support.

As far as burial and funeral costs, burial and interment in any VA cemetery (including Arlington) are provided without cost, as well as a headstone and other military funeral honors. The military will reimburse additional funeral related costs (which should be fairly minimal) up to $1,000. Immediate family member travel to the site of burial is also paid for by the military. If the family prefers burial in a nonmilitary cemetery, the military will reimburse funeral and burial costs up to $8,700.

For much more on the benefits provided to families of service members who die during active duty, visit A Survivor’s Guide to Benefits.

Burial and Funeral Benefits for Veterans

Some veterans who die after leaving the service are also eligible for monetary burial and funeral benefits. Typically, this includes those who were discharged under conditions other than dishonorable and who died while receiving a VA pension or compensation, or while receiving military retirement or disability pay, or while in a VA hospital.

Typically, the benefit for a non-military service-related death is $300 towards burial and funeral costs ($749 if hospitalized by the VA at time of death) and $749 towards interment costs. For service-related deaths, typically, the benefit is $2,000. These benefits are paid out to the veteran’s spouse, children, parents, or estate executor.

Unfortunately, military families need to be aware of potential scams in the area of burial. Some private businesses may offer “free gravesites” to veterans but upcharge the actual burial fee to make up for it. Be sure to look at a number of options.

Private vs. Military Cemetery

Many military families are interested in having their loved one interred in a military cemetery. The VA maintains 140 VA cemeteries in 40 states, so there is a good chance that one will be located close by. Gravesites cannot be reserved before the time of need, but it is possible to pre-apply to ensure eligibility.

Some veterans are eligible for cost-free ground burial in Arlington National Cemetery. This typically would include any service member who has received full retirement benefits and those who received special medals and honors (and their spouses and children), but for more detailed information, visit their site. Inurement of cremated remains is available at Arlington for any honorably discharged member of the military.

When military families prefer a private cemetery, the military will still provide (on request) a free headstone, marker, or medallion honoring the deceased’s military service, as well as a burial flag and presidential memorial certificate. To apply for these benefits, visit this page.

Veterans who served on active duty who were discharged honorably are also eligible for military honors at the funeral (which may include flag presentation, playing of taps, rifle salute, and a military detail) at no expense.

References:

Military.com. (n.d.) Burial Allowance. Retrieved from http://www.military.com/benefits/burial-and-memorial/burial-allowance.html

US Department of Defense. (2016). A survivor’s guide to benefits: Taking care of our families. Retrieved from http://download.militaryonesource.mil/12038/MOS/ResourceGuides/A-Survivors-Guide-To-Benefits.pdf

US Department of Veterans Affairs. (n.d.) Chapter 8 Burial and Memorial Benefits: Federal Benefits for Veterans, Dependents and Survivors. Retrieved from https://www.va.gov/opa/publications/benefits_book/benefits_chap08.asp

US Department of Veterans Affairs. (n.d.) Compensation: Burial benefits. Retrieved from http://www.benefits.va.gov/compensation/claims-special-burial.asp