Tough Love for College Frosh

I recently received this plea from a desperate mother: Could you do a column on last-ditch advice for financially clueless college freshmen like my daughter? She's already spent the summer earnings she was supposed to use for spending money at school on $100 jeans and going out every night with her friends. Her father manages her account (often overdrawn) because it's easier to do it himself. But I shudder to think what's going to happen when she goes away to school.

What's going to happen is that college could cost a lot more than you bargained for. You don't have to track every nickel, but your daughter needs a little shock therapy and a dose of tough love to hold her accountable and show her how to live on a limited income. Not only will you save thousands of dollars, but she'll get a priceless lesson in managing money.

Tricks of the trade. Before she leaves home, have your daughter spend a week recording all her expenses with her friends. If she spends $20 a night, convert that into terms she can understand -- $100 a week on food and movies equals, say, 12-plus hours on the job.

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Ask Dad to back off and have your daughter manage her own account. That means making deposits, saving receipts, balancing the account (either online or on paper) and learning how to write a check. (Hint: Go to Target or the Container Store and buy a matching notebook and Post-its to jot down expenses, plus a colorful container in which to toss receipts. Little reminders make a big difference.)

Before you shop for back-to-school gear (as your daughter will certainly expect), take an inventory of the stuff she already has. Then go together and set a reasonable limit on how much you're willing to spend. Your daughter will have to decide if she really wants to use up, say, one-fourth of her allotment on a single pair of $100 jeans.

Let her know up front which college expenses you'll pay for -- books, for example -- and which are her responsibility, such as food outside the meal plan. Because she's spent her summer income, you'll probably have to provide an allowance. Dole it out one month at a time, lest she blow through a semester's worth of cash in the first month. And when your daughter calls in mid September to say she's out of money -- and this is critical -- make her wait. Bail her out once and you're sunk.

Expect the unexpected. Even if your child is a good money manager, sending him or her off to college raises other financial issues. For one thing, parents are shocked at the cost of keeping a car on campus -- which includes not only insurance and a parking permit, but the tickets that are sure to add up when your child can't find a parking space. If you can, keep the car at home. With your young driver away, your insurance premiums might actually fall.

Anticipate surprise outlays. Suppose, for example, your son announces that he wants to join a fraternity. Does that fit into your budget -- or his?Set up an account with a bank that has low fees and plenty of ATMs near your child's dorm. College students are notorious for going to the closest ATM, even if they're charged a fee, rather than walk a block to a free machine.

A checking account with a debit card will do just fine. Discourage your kids from signing up for a credit card until they've learned to manage cash and you're confident that they won't run up a balance they can't pay off. One student told me candidly that he had used his "emergency" gas card to chow down at a service-station convenience store. Another student got a phone call from her father wanting to know "Who's this Steve Madden guy whose name is all over your credit-card bill?" (No emergency, Dad. Just a shoe store.)

Janet Bodnar, columnist and deputy editor, is author of Raising Money Smart Kids (Kaplan, $17.95).