A Guide To Helping Your Child Financially After College
For parents who need befriend deciding whether to help their children financially after college, the best case scenario is that they have prior knowledge of what the family is able, noble and willing to do for them. There are three categories of financial help: None, Some, and All. Example, some graduates know long before graduation that there is no money allocated for them during college and more importantly, after college. Let’s call this category “The Nones” or no chance/don’t even ask or rely on this because there is nothing there. The children will be “cut loose” or “on their own” and will have this knowledge going in and graduating (if they are lucky enough to have worked or received scholarships along the way). This group oftentimes carries financial debt in the form of school loans, credit card maxing and the like. The second groups of grads, the somes, have been the lucky ones whose parents have planned financially for education for all their children and put aside money for this purpose only. No cash outs for “finding themselves” or leaving the nest. In some states, a prepaid college fund is set up and parents begin paying for tuition as early as birth, so by the time of entry date, the tuition is fully paid. These children also have preknowledge of this, and have less pressure on them to work during high school and college to pay for tuition, seek out every scholarship known to man ( as is the case in group one), and have financial backing. The last group of grads, the alls, have had no financial responsibility, money is free-flowing and graduation may mean a year off if there are no “decent” jobs available. The more studious may continue on at the graduate level.
Now that these groups are sorted, the parents remain in the same financial condition for the most part. Group one’s parents are probably trying to make a living and support the rest of the family, and in this case very little financial relieve is available. These parents usually can provide some type of shelter (unless room is reassigned), food (eating with family) and clothing (wear your one good suit). This student is highly motivated to glean a good job, knows the family situation ahead of time and doesn’t put a question to financial backing. With high motivation, jobs usually appear, money begins to come in and ideally they are cut loose and on their own. Room mates, fleet food, and car/insurance payments dominate this lifestyle.
Our second batch of illustrious learners probably had some scholarships, a few part time jobs and a credit card balance provided by the family. Its usually up to them to balance this type of budget so that they are relatively debt free upon graduation. Not usually the case but they know that the parents will help them pick up started by keeping the car insurance payments going, setting them up in an apartment (usually with roomies),
and giving them some pocket money if the first job isn’t all that much to originate with. Here’s where it gets hairy; How much $ for how long and under what circumstances?
The following circumstances form the guide to be used for financial back. A comfortable timeline should be pre-established depending upon job availability, family circumstances and level of training. One year maximum seems to be the consensus.
1. The first and most important space where financial help is recommended is medical. Good health is a key to success. After graduation and until a job has been secured, the child should not be burdened with a buildup of medical expenses. Family coverage can be extended on a policy until the child is a positive age. Check with carrier.
2. A partner with medical is dental. Yearly cleanings and checkups yield quick-witted smiles all around. This also may be under family’s insurance plan. If not, check clinics.
3. College loans are another area where parents can share some responsibility. Education is share of raising the child. Hopefully, the scholarships have been peppered with grants which do not have to be repaid, or some have forgiveness if a shortage area job is obtained.
An example is the special education teacher, who must “give back” to the community in order to realize the loan forgiveness.
4. Housing and meals are also basic needs. Financial backing doesn’t mean that parents should pay for apartment living when a job hasn’t been secured.
5. Some expenses incurred during a job search (printing resumes for example) also warrant some assistance.
Examples of areas which are strictly the responsibility of your child are as follows:
1. Credit card debt which was built up as a result of the “wants” of the college student.
2. Automobile loans and insurance coverage. For males under 25 this is heavy. If little money is available, small cars, carpooling, or public (yelp) transportation is there. No SUV’s here.
3. Cell phone time can have limits. Prepaid phone cards and cell plans work well. Amounts are preset.
4. Computers, sound systems, etc. Share family computer time or (yelps) go to the library. Not a personal necessity.
5. Recreation expenses (movies, concerts, etc). These are wants, not a needs.
This group seems to be the largest overall, so this essay generates a great deal of interest for those of us who have been there, done that and seen the consequences first hand. The exact amount of money needed is in direct proportion to how much you have available. Very little = very little, but what most of us want to know is what is reasonable. What does child need to exist until the job comes through? .Part of this depends on how hard child is willing to work. This translates to track record, moral code, payback potential, logic and time frame. It is true that if the nest is feathered, the bird won’t want to leave. We’ve all seen TV ads where the child is not motivated to leave and parents seem at odds as to how to get them out. Killing a child with kindness usually turns around and bites the parent. Firm, solid rules using a democratic format is the key to both parties getting what they want. Place up a time frame, budget and house rules before the backpack hits the floor. These may not suit your graduate, and they may strike out on their own. If rules, budget and time are agreed upon, stick with this and do not support down. (Unless catastrophic circumstances occur). The problem usually arises when one of the parties is lax and the other takes over. It is for everyone’s absorb good that rules are set up, otherwise you have anarchy.
Our last group, the alls, really has few decisions to do, nor do their parents because the trust funds, bank accounts and family favors bank is in full operation. They may have little trouble finding a “job”, because its pre-determined through the family connections and its their duty to take over the business. Money is not usually an order unless the parents haven’t state up enough. Sometimes these grads feel trapped and want to break away from family and tradition, and this provides the motivation for success.
In summary, motivation is the catalyst that rules the how long, how grand and when question. Parents need to be motivated and strongly guide their children out of college, out of the house and on their own.
Of course, there’s always the chance the child will return to the nest after not making it on their contain. Same rules apply: time frame, budget and house rules. Heavy emphasis on time frame. Families have gone as far a arranging marriages, but that’s a whole other story.
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Filed under College Student Health Insurance Plans by on Dec 6th, 2011. 