Strict budgets don't work for university students, author says
Alison Griffiths says parents should practice tough financial love with university students
University students should monitor spending habits as opposed to trying to follow a strict budget, which is a strategy that one expert says does not work.
"Budgets are, in theory, they are great, but the problem is the making is the easy part. But a budget is actually pretty useless if you don't then do two things," said Alison Griffiths, an Ontario-based journalist.
"One is to track your spending and then you have to revisit the numbers to make sure what your spending fits the budget."
She says parents should help develop a monthly spending cap and spending guidelines.
Students typically run into financial trouble around midterms. At that time, parents should take a comprehensive look at the student's banking and credit card statements.
"I think one of the best parts of financial management in post secondary is that they get to experience failure," she said.
"We all experience financial failure and it's way better for them to do it in post-secondary institution than when they're out with a mortgage and two kids."
- Tips to save on back-to-school shopping this year
- Tips on how not to spend a fortune on back-to-school supplies
She says to practice tough love, even if they have to eat Ramen noodles, but parents should be willing to bail them out at least once.
Griffiths said it should come with the stipulation that the parent and student go through their spending habit.
"That way the student knows, 'OK, it's Starbucks or Tims or wherever it is,'" said Griffiths.
Griffiths said parents shouldn't have their names attached so the student can build credit. She warns they may get in trouble, but its better for them to learn now.
"Practice a bit of financial tough love, but also be sympathetic they are going to fail and they will need help and do help them," said Griffiths.
with files from Information Morning Fredericton