Preparing for college is a long journey, but the summer before your child starts school is often when the reality of it truly sets in. Before you send them off to campus, check out this college prep checklist of five financial tasks to tackle ahead of move-in day.
REVIEW YOUR FAMILY’S PLAN TO PAY FOR COLLEGE
By now, you’ve likely received your child’s financial aid package, so you have a sense of how big your college bill will be. That makes it a good time to discuss your family’s plan to pay for college. After the expected family contribution, scholarships, loans and grants, what will your child be responsible for? Will you help them pay the balance or are you expecting your child to pitch in with their own savings or income? If your child is taking out student loans, it’s also a good time to explain how student loans work, including the difference between public and private loans, and subsidized and unsubsidized loans.
GO OVER A BUDGET
Even if their room, board and dining hall meals are covered, your child will still need to account for some extracurricular spending. You might need to teach your child some money basics: Estimate how much they might spend on things like living expenses, school supplies and social activities. Determine how much money (if any) you plan to give them and whether they’ll have to get a part-time job to help cover those expenses.
SET UP BANK ACCOUNTS
Does your child have a bank account set up yet from which they can pay bills or access cash? See if your preferred bank has a branch near campus, or if you can open a student account at a nearby location, so that they avoid incurring fees every time they take out $20 from the campus ATM. And if you decide to get them a credit card, or your child wants to open one in his or her name, be sure to talk to them about establishing good credit card habits and establishing boundaries around what the card should be used for.
GET ALL LEGAL PAPERWORK IN ORDER
When your child turns 18, they’re an adult in the eyes of the law. That means that without the proper paperwork, you could be cut out of some very important decisions. Consider pulling together:
A medical power of attorney. You’ll need this if your child is ever in an accident. Without one, a doctor might be prevented from giving you a medical update or you may not be able to make medical decisions on their behalf if they’re unable to.
A durable power of attorney, which allows you to act on your child’s behalf for financial and legal matters. For both these documents, check with your attorney to make sure you are following rules applicable to your home state and the state where your child will be living, if they differ.
UPDATE YOUR HEALTH INSURANCE
Many schools offer student health plans, which offer basic, on-campus coverage at an attractive price. If you elect to keep your child on your health insurance plan, contact your carrier to ask about out-of-state coverage, if applicable. It's also a good idea to find a provider and pharmacy near your child’s school.
CHECK YOUR CAR INSURANCE
If your student is bringing a car to campus, make sure they have their car insurance information and understand their coverage level; you might be able to get a break on rates if campus is located in a more rural area. If your child won’t be driving on a regular basis while in college, ask your insurer about discounts, too. Student discounts often apply to college students, particularly if they’ve moved 100 miles or more away, and you may be able to change your child from a primary driver to an occasional driver.