Parents of College Students: How To Keep Your Finances Healthy During the Coronavirus
Posted on October 06 2020
How will we remember the year 2020? There's no question the whole year has been incredibly challenging, as people from United States cope with the Coronavirus outbreak, civil unrest, fires and the economic impact due to loss of jobs. As of August 2020, the national unemployment stood at approximately 13.55 million unemployed persons. Unfortunately, life will not be returning to normal anytime soon.
For parents who still have a son or daughter attending college, the financial strain can be significant. For this reason, students have been signing petitions for tuition cuts if the college or university continues to provide instruction remotely or online. Aside from paying for college tuition, 79% of parents of adult children continue to provide support for other living expenses both large and small. However, is there a way to do so responsibly without jeopardizing your own financial security?
Many parents would like to know which living expenses are safe to pay for and which ones are not. According to Bruce Horovitz there's 5 ways to help your college student financially without compromising or hurting your own nest egg during these challenging times.
Instead of purchasing a used car for your college student, let him or her use your car. During the Coronavirus, it may make more sense for your college student to drive individually rather than take public transportation. You might also consider keeping your college student on your car insurance policy. There are several benefits, such as saving you money. According to Insurance Neighbor "your provider will likely give you a discount for adding another driver to your policy."
2) Cell Phones
It's interesting to note that 49% of all mobile phone owners with children 18 or older continue to keep their adult children on the family cell phone plan. Why? More than half of the parents selected this arrangement because it saves money for both parties. Some adult children elect to pay their share while others indicate that their parents cover the cost for them.
If your college student attends college close by or if his or her college or university is only delivering instruction remotely, suggest to him or her the option of living at home. Saving money on rent and housing expenses, for even a short period of time, goes a long way in helping your college student meet certain financial obligations. If living at home is not an option, suggest living with roommates or moving to a less expensive location to keep costs down.
4) Health Insurance
College students have an option to remain on their parent's plan until age 26. Your insurance agent should be notified when your son or daughter is enrolled in college. Keeping your student on the family policy may work for many families, however, it's important to note that your benefits may not include doctors and medical facilities in the area where your college student is attending college. They may be considered out of network. If this is the case, you may want to purchase the college's health plan.
As surprising as it may seem, nearly half of all college students fear running out of food before they have the money to purchase more. Therefore, inviting your son or daughter to stock up on groceries, from your pantry, before returning to school would be a highly appreciated thing to do. If it's difficult for them to get home, you may consider sending them a care package. If you are short on time, hugabox offers many thoughtfully curated care packages containing snacks with 90% of all of the proceeds going to childhood cancer research.
Last year, Forbes created a list of things that are not okay for parents to fund. They include:
1) Unsustainable Lifestyles- If your son or daughter would never be able to afford payments on a car, house, or office if you were to quit providing financial support, then you should not attempt to fund them in the first place.
2) Entertainment Expenses
3) Don't pick up costs that do not have an end date.
4). Finally, one of the worst things a parent can do is give their son or daughter a credit card in case of emergencies. According to nerdwallet, "if he or she makes a series of frivolous purchases that you can’t pay off in a month, you could end up in debt." And if you attempt to take the credit card away, your relationship may falter and eventually cause ill-feelings between the two of you.
Some parents, who are currently paying for items for their son or daughter, may make arrangements to have the money paid back while others feel compelled to not ask for anything in return. Another option might be something parents rarely do and if they do, it's typically with younger children- bartering. For example, if your college student uses your car for a semester, perhaps they can babysit their younger siblings or the family pets every now and then or help grandma or grandpa fix something. If they live in your home, asking them to maintain a family business website may be more appropriate. They could send out promotional emails and design the social media posts. It's a great lesson to teach our young adults- you don't always need money to obtain the goods and services that you want and need. Be creative! You may just discover a closer relationship will develop as a result.
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