Schwab MoneyWise ®

Life Away From Home

Preparing for the practical side of college life.

Our Two Cents

If you have a 529 plan or an education savings account (ESA) for your child, be sure to review what's considered a qualified expense as you prepare to make withdrawals.

As a parent, you've probably been planning and saving for your child’s college education for a long time. And, ideally, your young adult has savings, too.

But beyond tuition, there are several other financial and practical life-skill considerations to discuss with your teen before he or she heads off to college. Make sure to:

  • Review everyday living expenses and create a budget together using the Budget Planner.
  • Be clear about what you expect your student to pay for.
  • Open savings and checking accounts with them. If your teen needs a credit card, help them shop around for the one with the best terms. If they are considering taking out a loan, help them evaluate the rates and terms.
  • Discuss how to deal with emergencies. Is your child an authorized user on your credit card, just in case? Again, be sure to set up a budget that will help them be prepared for financial emergencies.

A financial checklist

Along with personal items teens need for college, a financial checklist can also help them prepare for life away from home.

Take the time to review the following items with your student:

  • Does your teen have a checking account? If not, establish one.
  • Does your teen's bank have ATMs on campus? If not, your teen might want to change to a bank with on-campus ATMs, to avoid fees.
  • Does your teen have a credit card? The Credit Card Accountability Responsibility and Disclosure Act of 2009 imposed several new restrictions on card issuers. In an attempt to protect young people, the act requires that all consumers under the age of 21 either have a co-signer or be able to demonstrate "independent means" to repay their obligations.
  • Set clear financial expectations. Make a list of what you will be paying for versus what you expect your child to pay for.

Where is college money coming from?

  • Your contribution—If you're providing financial assistance, will you deposit money into a checking account or will you send money on a regular basis?
  • Your teen's contribution—How much will they be expected to pay using income from a part-time job? Tip: Encourage them to look for work-study programs, which are based around the school's schedule and allow students to study during downtime.
  • Loans—If your teen is receiving loans, work with them to create a budget that will help ensure the money lasts through the school year.

Going off to college is an important life experience—for both you and your teen. Working out the financial details and expectations beforehand can make saying good-bye a little easier when the big day arrives.


The information on this website is for educational purposes only. It is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner, or investment manager.

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