Daughter Passes Test On Handling Finances

January 7, 1991|By HUMBERTO CRUZ, The Savings Game

Here is the report card for my teen-age daughter, Veronica, after her first semester at the University of Florida.

From her teachers, a B+ average in American literature, math, existentialism and French.

And from the toughest grader, her Dad, at least a B in managing money for the first time.

For college freshmen, the first semester away from home means learning to handle the checkbook as well as the textbooks. ``College should be an experience of learning that the checkbook runs out,`` said a story in Weekly Business that my wife and I discussed with Veronica around the kitchen table.

So on this much we agreed: Our daughter would manage her money on her own, not run to Mom and Dad to pick up the tab.

Deena Katz, a financial planner in Coral Gables, suggests that college freshmen find out what it costs for first-year living expenses and that parents decide how much they will contribute.

That`s what we did. When we drove to Gainesville for a college ``preview`` in July, the first session of the two-day program for parents was not on academics, not on dorm rules, but on ``Money Matters.``

The UF people estimated a full academic year would cost $6,450 -- from tuition to dorm to food to doing the laundry. ``If money comes from home, it may be best to receive it in monthly installments,`` a brochure from the Office for Student Financial Affairs advised.

After a little give-and-take, Veronica agreed to pay $750, or half of a $1,500 scholarship she won. We agreed to pay the rest.

That, after tuition, housing, dining card and other start-up costs, came up to $100 every 15 days during the school year.

Once you`ve agreed on your contribution, Katz suggests treating it like a paycheck. ``You want to mirror real life,`` she says. So we ``pay`` Veronica $100, on the 4th and 19th of each month.

And no more, despite initial pleas of poverty from our daughter and repeated tales of how her friends at the dorm get whatever they want, whenever they want it, from their parents.

To make things easier, Veronica opened a checking account in her name at a SunBank here. SunBank has an automated teller machine at the university`s Student Union, so the $100 we deposit in her account is available to her in a day or two.

And how has the plan worked out? ``I don`t really spend much more than the $200 a month,`` she tells me. ``I buy cereal, things to have for breakfast, cold cuts, bread, milk and crackers, lots of fruit, macaroni and cheese, and soup.``


``A few throw pillows to make the dorm room more livable. ... and parking tickets, which are inevitable at the UF campus.``

And the long-distance phone bill?

``It was $50 for the first month, then $75. This past month it was $22, I didn`t talk to as many people. But the phone bill is a worthy expense. I don`t mind paying that.``

And clothes?

``I buy maybe one new thing in clothes a month. In Gainesville, you need winter clothes. If you buy a sweater, and look at it as splurging, even though you need it, it`s better. It makes a treat out of buying something you need.``

Pretty grown-up for an 18-year-old. So why not an A in money?

Veronica does not always know how much is in her checking account (although, thanks to the money she saved while in high school, it`s safely above the minimum to avoid fees). She let a couple of checks sit around for days without depositing them, losing interest. And she paid unneeded $1 fees, half a dozen times, for withdrawing $20 at a time from a non-SunBank ATM in Gainesville.

``A lot of times the SunBank machine is broken,`` she explains. Solution: Cash a check for free, up to $20 a day, at the dorm.

Still, she has done well enough to earn an 18th birthday surprise: a no- fee-for-two-years Barnett Bank Visa card in her own name.

``It`s not good to carry much cash or your checkbook around, and it`s also not very convenient to make frequent visits to the ATM, so the credit card comes in handy,`` Veronica says. ``I know I would use it responsibly and not spend it on frivolous things.``

Pretty smart thing to say, Veronica. Your grade just went up to B+.

Humberto Cruz is day city editor of the Sun-Sentinel.

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