Weekly Update - August 5, 2015
Sending a child off to college? Sit down together and go over these important financial issues before dropping him or her off for the semester.
- Update insurance coverage:
While some homeowner's policies will cover your student's belongings while living in a college dorm or apartment, not all policies offer this benefit. Check your policy language or consult with an insurance expert to make sure that you have enough coverage for expensive items like computers, electronics, and textbooks. If not, renter's insurance can usually be had for a low annual premium. Some housing complexes may require separate renter's insurance as part of the lease.
If your child is taking a car to campus, update the auto policy with the new address and make sure that your policy conforms to state requirements. Also, think about adding Roadside Assistance to keep your child from being stranded in the event of car trouble.
- Get your student set up with a credit card:
If your child doesn't already have a credit card, now's the time to apply for one in his or her name. Many credit card companies target college students with gifts and promos to lure them into high-interest rate credit cards. Have a discussion about responsible credit card usage, interest rates, and late fees so that your student understands the importance of paying off the balance each month. Also discuss the importance of having an emergency cash reserve to avoid going into debt when sudden expenses occur.
- Open a new bank account:
Check to see whether your bank has a location close to campus. If not, consider opening up a new account. Ideally, you want a bank that has an ATM as close to campus as possible to help your student avoid racking up ATM fees whenever he or she needs to withdraw cash. Often, local banks will have account opening drives during orientation or the first week of classes.
- Find a local physician in your network:
While many colleges and universities have comprehensive student health clinics, your student may occasionally need to visit an off-campus physician. If so, make sure you have a list of physicians and specialists who are within your health insurance network. Before leaving for the semester, have your student make any necessary medical appointments and get prescriptions refilled.
- Discuss financial aid and other responsibilities:
Sit down together and make a budget for the semester. Most colleges have worksheets and sample budgets that estimate what the average student will spend each semester. Make sure that you understand all financial aid deadlines and have them marked in the calendar to avoid missing payments or losing eligibility. Talk to your student about balancing academics against work-study or off-campus employment.