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How to Balance Your Books While the Kids Hit Theirs

September 08, 1996|LINDA STERN | Linda Stern is a columnist for Reuters

Sending a kid off to college this year? Then it's probably too late for financial advice; you're already broke. Between the tuition tab and the August shopping trips for little coffee pots, dorm room shelves and more, more, more, you're probably wondering what's left.

Now that the worst is over, there are a few ways to save money, or at least protect the little you have left, while your child enjoys that first year of balancing books with too much fun. I hope this helps.

* Notify your auto insurance company. If all the cars stay home while your child moves at least 100 miles away, your rates will drop substantially. They'll also drop if she takes the car with her but attends school in a town your insurance company considers safer than the one you're in now. What's typical? A $1,430 annual premium will drop to $700 if the car stays home, says one company. And she's still covered when she takes it out on vacations and over the summer.

* Another thing about insurance: If your child lives in the dorm, your homeowners policy probably covers her computer and CD player. Once she moves off campus, she's on her own and should consider a renters policy.

* Learn to love e-mail. Even if you're behind the curve, your kid won't be. Most college students get their electronic-mail addresses when they get their student IDs, and they have free access. You could chat daily and really keep in touch without spending for all those long-distance calls.

* Alternatively, consider getting your own 800 number. For $4.50 a month, AT&T will set you up to receive calls from anyone. You pay for the calls, but with a discount plan you can cut the cost of them to 17 cents a minute. This is especially convenient if you have more than one child living away from home and is cheaper than the prepaid calling cards many students use.

* Debit, not credit. College towns are light-years ahead of the rest of us when it comes to smart cards. Many student ID cards have chips that hold cash, and the stores surrounding the campus will take them like money. This may keep your child from wasting or losing loose change. And it will certainly keep him from running up too much debt on credit cards he can't pay off.

* Go on the plan. The level payment plans that many colleges now offer make tuition an easier nut to crack. When you pay monthly instead of all at once at the beginning of the year, you can delay the inevitable day of borrowing, and keep money in the bank earning interest a little longer.

* Liquidate your child's account first. Does your family have to pay $12,000 this year? And your daughter's account has $9,000 in it? Use it to pay the first $9,000, then front any money she needs for other expenses yourself. Next year, when she's filling out all those aid forms, her money won't count against her.

* Book flights now for Thanksgiving, winter break and other visits home. The earlier you book, the more likely you are to get discounted fares.

* Don't buy too much stuff. Refrigerators, computers, lamps and stereos can come in handy, but your child may not need them at first. Many schools offer computer centers, and many roommates come with stereos and refrigerators. You may worry that items will be more expensive in the college town, but that's not always the case. Older students moving on may be trying to unload the same things your child is seeking.

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