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When Does a College Student Become Financially Independent?

This article was written a while back and I wanted to share it again.

When does a student become financially independent?  This is a question I keep struggling with.  I am dealing with this same question in my life.  My husband and I are working with our son, a sophomore in college, to help him obtain financial independence. Why are we doing this?  Our son told us he would like to be financially independent and asked for our assistance to work towards this goal.

This independence question comes up when you turn 18.  This is when you are now (for all intent and purposes) an adult which means you are supposed to be independent. Right? Well, it is not that simple any more.

When I started college (many moons ago), I needed assistance but after about a year, I was able to be pretty independent. I had a job with benefits, had my own bank account, paid for and owned my own car, and paid for insurance, meals and clothes, etc...  In those days, things were a lot cheaper but we didn't make as much either. I did have to live at home for a while in order to do this since I could not afford rent at that time. Was I independent? Yes, I was independent except for the living arrangements. I also made all my own decisions and no one assisted or guided me with regards to my major, classes, etc...  However, we also did not have cell phones, computers, and all the technology we have today. I know this sounds really ancient but it does make a huge difference.  All these things cost money to own and to run.

Today, I find that it is more difficult for students to obtain financial independence quickly. It depends on the situation but here are some of the issues students face:

  • The Need for a High GPA - GPA's of 3.5 or higher is a must have for many companies so students have to study harder and longer to obtain this. Many schools programs are extremely rigorous and a full-time load is really full-time.  This means less time for working.
  • Helicopter Parents - Parents are making many decisions for children way past the age of 18. Instead of helping them work towards independence, they are making decisions perhaps the student should be making. Many parents tend to pay for most everything for the student without a thought.  This hinders the students ability to grow and learn life lessons.
  • College Involvement - Many students are heavily involved in programs or athletics in school.  It is difficult to work and be committed to studies and a full-time varsity sport (s).
  • It is a Busy World with Little Time - Life is just busier than ever with so little time and so much to do.  Balancing all the things to deal with makes it difficult to work while in college.
  • College Costs - College costs have become quite astronomical. In many cases, it is impossible for a student to be completely financially independent particularly if they are attending a private school. Parents are having to assist more today than ever before.

Here are some ideas to help students reach financial independence by the time they graduate or shortly thereafter:

  • Budget - Students should sit down with their parents before they turn 18 and obtain a list of all the expenses the parents pay for.  Both parties should discuss items that the student can be begin to start paying for.  Over a period of time, the student should begin to take on more responsibility for expenses.  For example, during the first year, the student is responsible for their cell phone bill, during the second year, add the car insurance, etc...
  • College Costs - Both parents and students should be involved in filling out financial information for FAFSA, deciding on a school, obtaining scholarships, loans, grants,etc...
  • Developing Credit - Credit is something that a student needs to start developing. I recommend having a very low credit limit ($100), charging small items and paying them off the same month. Whether you start in freshman or senior year, the earlier you are able to establish some credit, the better off you will be.  If your parents are involved in paying for your education, let them know you are doing this but don't rely on them to bail you out if you get in trouble. I don't recommend parents signing for the credit card or giving the student a credit card.
  • Planning for the Future - Now is the time to set aside savings for an apartment rental when you graduate.  The student should look through the local newspaper or Google apartment expenses and get an idea of today's rent, down payment, utilities, etc...
  • Work with Your Parents and Surprise Them - Both parents and students should work together as a team and discuss how to gain financial independence and set realistic goals.  You will most likely surprise your parents at the good decisions you can make on your own.  Remember, goals can be reevaluated and adjusted as needed.
  • Do Research - There is plenty of information on finance geared to the college student.  I recommend finding a good book or taking a finance course.
  • THINK Like an Entrepreneur - Perhaps starting a business while in college to help pay for some of the bills is something to consider.  My son started a business over the summer selling bicycle parts and is now planning on starting another business.  I am amazed at how resourceful he has become and how much money he has made!  He is learning how to manage money and build a business.
  • Ask Your Parents to Let Go A Little (And Then a Lot) - Ask your parents to let you start making some decisions.  Perhaps you start small and work your way up such as opening your own bank account.  Making decisions helps you grow as an adult.
  • There are No Mistakes - Learn from your lessons as difficult as they may be. There are no mistakes. Don't rely on your parents to bail you out every time something doesn't go the way you planned. Learning life lessons early on in life prepares us to be stronger more independent adults.

I don't know all the answers to this question but I know this question exists and I am trying to figure out how to help students and parents think about ways of working together to address this issue. I do know that working with our son on this very issue has brought us closer together as a family.  It has helped him understand the value of money, education, and independence as well as making sacrifices in order to grow as a person.  As he moves through this process, he is developing sound decision making skills, leadership qualities, and a wonderful level of confidence.

Since this article was written, our son graduated college in May 2013. He is making headway towards his financial independence. He is still trying to find an affordable apartment but other than health insurance, he has taken over all other bills. Smile time!

I welcome your thoughts and ideas as I have just really touched on this topic. Please feel free to contact me at

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