In a school setting, where late-night takeout and impulse shopping splurges might reign, your teen will be responsible for some spending decisions you used to make. The answer? A budget, says Tamsen Butler, author of The Complete Guide to Personal Finance: For Teenagers and College Students (Atlantic Publishing Group, Inc.) Sit down with your child and review his likely expenses and how much he'll have to put toward them. Then create a list of categories, like "Food," "Housing and Utilities" (if he's living off campus), "Transportation," "Entertainment," "School Fees," and maybe even "Savings," and allot a dollar amount to each. Remind your son to log his expenses regularly, and that a little deviation isn't necessarily a bad thing as long as he defaults back to the plan you've created together.
It's important to clearly establish how your teen will access his spending money. If you're contributing to his everyday funds, Butler recommends opening a joint savings or checking account so you both have access. Choose a bank with branches at home and on campus, or at least strong online access. Well before orientation, walk him through check-writing (have him write a few for you, that you then sign and send), depositing and withdrawing money, bill-paying, and keeping track of debit card expenditures. Finally, open a credit card in both his and your name, which will be for emergencies only, suggests Butler. Make sure you spell out what constitutes a need (yes to a tow if his car breaks down; no to a group snack attack) and that he understands that you'll be checking for unnecessary activity.