The College-Bound Child Checklist

I'm Janet Bodnar, Deputy Editor for Kiplinger’s Personal Finance Magazine. I also write The Money Smart Kids Column at Kiplinger.com, and I'm author of the Book Raising Money Smart Kids.

Today we’re going to talk about five things you need to talk about with your high seniors before you send them off to college.

First thing you have to do with your kids is choose the right bank. Now, choosing the right banks means choosing a bank that has low fees obviously. But it also means choosing a bank that’s convenient for the kids because trust me they will not walk one block out of their own way to go to their own bank’s ATM. They're going to go to the one that’s right in front of them right there in the dorm. So pay attention to those little details because it’s going to save you time and money in the long run.

The second thing you have to discuss with your kids is who’s going to pay which expenses. This is really a big deal or can turn into a big deal. You, for example, are assuming that the kids are going to buy their own books out of their summer earnings and they of course are assuming that you're going to buy the books. You got to say ahead of time this is what we’re going to buy and these are the responsibilities that you're going to have.

Once you’ve set up the responsibilities that the kids are going to pay for, you have to feel some confident that they are going to be able to manage their money either for a whole semester if it’s going to be their own earnings or on a monthly basis if you're going to be giving them allowance.

So first of all at least the first they should be keeping track of what they're spending so that they don’t run through a whole semester’s worth of money in one month and you get the phone call “mom and dad I need more cash”. No you don’t want to give them more cash so again you have to set up the ground rules and the discipline early on.

The next thing you have to do is anticipate unanticipated expenses, unexpected expenses. This is what's going to happen, again I guarantee your kids are going to go up to school and you're going to get a phone call monthly and “gee mom or dad I'm thinking about joining a sorority or a fraternity and it’s going to cost $1000 perhaps more than that. There's the bill that you hadn’t bargained on, are you willing to pay this, do you think the kids should pay this. Be aware that this is going to be one big expense that might come up, there might be others as well.

And finally, there's the issue of credit cards. I truly believe kids especially when they’re freshmen and they go off to college do not need a credit card. They can manage quite well with the checking account and the debit card. I recommend that they not get a credit card until a few years have gone by and you and they are confident that they know how to actually manage their cash money.

So encourage them not to sign up for the free t-shirt or the free cell phone minutes or whatever it is that the credit card issuers are giving away. I think it will be much to their benefit and to yours as well not to get into credit card or at least have that temptation.

So once you’ve paid the tuition bills, don’t forget to discuss the other financial issues with your kids before you send them off to college and then you can be confident that even as college students they’ll be money smart kids.