A Proactive Parent’s Guide to College Financial Planning

Preston Rosamond |

If you’re a parent, guardian, or relative of a student about to enter their college years, we want to help you with college financial planning. At The Rosamond Financial Group, we believe having a clear understanding of financial responsibilities is crucial for young adults to make the most of their opportunities.

As a seasoned financial advisor, I wrote this article to equip you with a checklist of essential financial tasks to tackle before your child heads off to college. I cover everything you need to know to create a smooth financial transition for both you and your soon-to-be college student. 

Make a Plan for Expenses

If you already have funds saved in a 529 plan to help pay for eligible school expenses such as tuition, fees, and room and board, your college planning should be relatively simple. However, don’t overlook additional costs such as transportation to and from school, dorm room supplies, dining out, purchasing meals not covered by their meal plan, entertainment, parking, and Uber/ride sharing.

Together, you and your student must determine a budget that makes sense and accounts for these recurring costs. There are numerous budgeting apps available which parents and students can use together to create a realistic spending plan. This Forbes article lists the most popular budgeting apps of 2024.

Before the start of the first semester, creating and discussing a spending strategy can help your student have a more practical understanding of their expenditures and better knowledge about their financial decisions.

Discuss Credit Card Ownership

It’s a good idea to let your student know they are in charge of making monthly credit card payments. Even though legally this is your duty as a parent or guardian to make sure the card is paid off each month, your child should be responsible for keeping an eye on credit card balances. It helps them build an awareness of their purchasing patterns.  

Start a Checking Account in Their Name

While apps like Venmo and Zelle facilitate payments to reliable friends and family, most financial institutions still need payment from a traditional banking institution. Consider opening an account in your student’s name with a credit union, a bank location that is convenient for them, or a bank connected to the school. This can also result in lower ATM fees.

Talk About Healthcare Responsibilities

As part of your college planning journey, give a copy of your health insurance policy numbers to your student. Get a healthcare proxy and HIPAA release form you can give your student as well. As college students approach or have reached the age of 18, you are no longer legally permitted to view their medical records or make decisions about their care without them. They need to know this.

Clarify Their Financial Aid Awards

If financial aid is a part of your college planning strategy, read the financial aid award letter with your child to explain possible requirements of the award. For example, students in the government work-study program must locate employment within the first few weeks after arriving on campus. Neglecting to review the details of the financial-aid program runs the risk of your child not being able to use the awarded money. 

Examine Your Insurance Policy Together

Together, verify whether your student’s dorm room is covered by your insurance policy or whether getting dorm insurance would be a wise decision. If your child’s possessions in their dorm room are lost, stolen, or destroyed, dorm insurance can replace them. Dorm insurance usually costs less than renters insurance, depending on the plan.

Talk About Roth IRA Contributions

If your student has worked in the past or intends to work this year, remind them to make contributions to their Roth IRA. If they are older than 18, they can open a Roth IRA on their own; if not, it must be a custodial Roth IRA.

As a parent, guardian, or relative, you can make a contribution on their behalf and help them get a head start on their finance management. For 2024, the annual contribution can be their earned income or up to $7,000. 

Partner With a Professional

Exploring college planning options with your college-bound student can be a challenge. 

When you’re ready to seek the advice of a professional, our team at The Rosamond Financial Group is here to answer your questions. We’re dedicated to supporting, educating, and providing informed direction to a diverse group of clients and their family members.

To get in touch, call my office at 830-798-9400 or email solutions@rosamondfinancialgroup.com

About Preston

Preston Rosamond is a financial advisor and the founder of The Rosamond Financial Group Wealth Management, LLC with over two decades of industry experience. He provides comprehensive wealth management and financial services to successful business owners, corporate executives, and affluent retirees who enjoy simplicity and seek a professional to help them pursue their goals. Preston personally serves his clients with an individual touch, a sincere heart, and his servant’s attitude is evident from the moment you meet him. Learn more about Preston or start the conversation about your finances with him by emailing solutions@rosamondfinancialgroup.com or schedule a call on his online calendar.