IT SHOULDN'T TAKE A TRUCK TO MOVE INTO THE DORM

Gearing up for college move-in is another chance for teaching budgeting and common sense.  Having a teen leave the nest for the real world is a milestone but we shouldn't try to assuage our anxiety with unnecessary shopping and spending.

First your child needs to find out what is provided by the school and also what is permitted in the dorm room.  Keep in mind that dorm room space is limited. Now it's time for a list.

You and your young adult need to make three lists: “must-haves”, “wants” and “bring from home”. Remember to research prices and list them with each item.  Set a realistic budget and stick to it.

Before you make any purchases or decide what to bring, your child should contact the roommate.  They can save money and clutter if they don't duplicate items that they can share.  For example, one can bring a microwave and the other a floor lamp or stereo.

Remember that this is your child's time to grow.  Let them make decisions.  Having matching bedding might be a priority for you but not your son or daughter.  You are not the one heading off to college.  Don't obsess about remembering every last sundry, snack or notebook.  Even the most remote campuses have commissaries and book stores.

Get ready to start baking your kid's favorite cookies to put in those “care packages”!

BACK-TO-SCHOOL BUDGETING REFRESHER

It's back-to-school time again and that always means it's also “back-to-spending” time.  This season people are projected to spend nearly $670.  This is a great time to teach your children.  Let's get back-to-basics.  Start by helping them make a spending budget for the two major back-to-school categories of supplies and clothing.

Begin with supplies.  First get a list of all the recommended supplies your children will need for the school year.  “Need” is the important word to focus on.  Give each child a small notebook and show them how to list each item and price.  Ask what supplies they think they will need or want for this year.  Again, they should write down the item and its price.  I recommend that you should pay for all the “needs” and have them pay for their “wants”.

Next, do the same thing with their clothing budget.  The list should be specific, detailing how many of each item they think they will need.  The total cost is likely to surprise you and your child alike.  After getting the totals, you decide the final amounts and prices.  If they say that the “need” three pairs of popular boots at $200 each, you get to say “I'll pay for $40 boots”.  We know this isn't going to be easy but this is a worthwhile lesson.

Your children can now start to understand the dynamics of planning, and most importantly, budgeting.

ARE THINGS LOOKING UP FOR STUDENT DEBT: NOPE

Generally, debt is down for the American consumer. Mortgage debt and credit card debt is being paid down – but student loan debt is not. It stands at roughly $1 trillion and rising.

Why? For starters, during the recession many people decided to return to or stay in school because job prospects were so lousy. People were hoping to wait out the recession and improve their chances of getting a job when it was over.

Student debt has also increased because of the rapid rise in the cost of college tuition, which is growing faster than inflation. Also, Mom and Dad may not be able to contribute as much as they had expected to, because they may be unemployed.

Some of the college debt burden is also falling on students’ parents and grandparents; almost 17% of outstanding past-due student loans are held by those over 50, and almost 5% by those over 60, according to an economist at Barclay’s Capital. This is the time parents and grandparents should be saving for their retirement, not worrying about college debt.

My advice? Remember, your offspring can borrow for college, you can’t borrow for retirement.

The Reinvented Wedding

Twenty-seven thousand dollars is a lot of money for a party even if it is the most important day of your lives.  According to theKnot.com and WeddingChannel.com, that's what the average wedding now costs.  Costs are even higher in the more expensive markets such as New York City and Chicago.  This is a good and sensible reason for the recent trend toward more homespun and creative wedding receptions.

In this sluggish economy more and more couples are turning to simpler, intimate and sometimes off-beat ways to celebrate.  According to Amy Kaneko, an events planner in San Francisco, “the backyard is the new ballroom.  “I think people are waking up to the insanity that is the wedding market” said Marin County, California caterer Stacy Scott.

Couples are opting for simple ceremonies followed by downsized receptions including picnics, barbecues or simply inviting only closest family and friends utilizing such venues as public parks, backyards or the living rooms of friends or family.

Another reason for the new trend is that marrying couples are now at record high ages. According to Brides Magazine, the average age of the bride is now 27 and the average age for the groom is now 29.  Couples are busy and have to do their planning in the midst of work and other pressing commitments.  These simpler festivities can take as little as two weeks planning and coordinating.  Often guests are asked to bring their own chairs and cushions.  Some couples have even gone the “covered dish” route asking friends to bring food and beverages.

Several years ago I worked with a couple to budget a wedding for a feature on Oprah.  We put together a complete Las Vegas  wedding for ten thousand dollars.  The key, as with most financial decisions is having a budget and sticking to it.

It is essential that the marrying couple and family [if they will be shouldering some of the cost] assess their finances, make a budget within their means and meticulously adhere to the plan. You must accurately assess all costs that will be involved and be honest and realistic about them.  Also include a category for unexpected costs.

Stay within your means and don't let your emotions get in the way of your financial health. If you can't afford an exorbitantly priced new designer gown, consider buying a gently used one or perhaps borrowing a gown from family or a friend.  You can always have the dress tailored to fit you which is far more cost effective than buying a new one.  If you are going to have your reception at a restaurant consult with the establishment to find a cheaper time of year or day of the week.  It's OK to break with tradition.

These are all great ideas even in better economic times.  Often the year of preparation and lavishness of the traditional wedding can overshadow the real meaning of the gathering.  These less formal, less frenetic celebrations make for a special day that everyone can enjoy and remember.

There's No Place Like Home

Traditionally, “fleeing the nest” has been a rite of passage for kids heading off to college.  Both children and parents look forward to the new life-stage.  Kids eagerly anticipate their freedom.  Parents dream of a clean, vacant extra room in the home.

According to a recent study from the largest student lender, Sallie Mae, this year more than half of the students surveyed lived at home while attending college.  This is up nearly 9 percent from just last year with most of the rise coming from families with over $100,000 in yearly income.

The study also noted that there has been a noticeable change in the way college is paid for overall.  Students are carrying a larger percentage of the cost, up 6 percent from four years ago. Parents are paying 7 percent less.

Along with choosing less expensive colleges, remaining in the family home has become another popular tool to help offset  the high cost of higher education.  Postponing the “fleeing of the nest” is not, however, without complications.

I discuss this topic in Money Still Doesn't Grow on Trees in a chapter on kids moving back home but it also applies to kids who don't leave.

Both parents and kids must have a set of rules.  These rules won't be the same ones that you used when your kids were minors and you were completely responsible for them but your kids are not your roommates.  Remember, it is still your house.

Two very important issues that you need to clarify up front are “who pays for what” and “my house, my rules”.  Be specific.  Negotiate a fair contract.  For example, you're probably not going to set up a curfew but you want to be notified if your kid isn't going to be home when expected.  On the other hand, you're not going to enter his or her room to gather dirty laundry from the floor. Coordinate on a reasonable budget to determine “who pays for what”.

Parents, forget those paint swatches and hold back on ordering that new treadmill.  That “extra” room might not be vacant for a few more years!