From One Parent to Another
10 Financial and Legal Essentials Before Your Child Heads to College
The day is almost here. My own son is heading off to college next month, and like so many parents, I’m standing at that emotional edge—proud, excited, and slightly undone by the thought of letting go. Whether your child is off to college, a gap year, or another adventure, this season of transition is big—for both of you.
Amidst the shopping lists, dorm checklists, and emotional goodbyes, it’s easy to overlook a few important financial planning steps that can truly matter. Here are 10 key things to consider, both as a wealth advisor and as a mom deep in this moment with you.
1. Legal Documents: Power of Attorney, Health Care Proxy, and FERPA Release
Once your child turns 18, you no longer have automatic authority to make medical or financial decisions on their behalf—even if you’re footing the tuition bill.
- Durable Power of Attorney allows you to step in for financial matters.
- Health Care Proxy enables you to make medical decisions if your child is incapacitated.
- FERPA Release Form (Family Educational Rights and Privacy Act) gives you access to academic and billing information. Without it, colleges cannot legally share grades or tuition status—even with parents.
Get these documents signed before they leave. It’s a small step that can prevent major complications later.
2. Create a Budget—and Set Expectations
Talk openly about who’s covering what. Will you pay for school supplies, meals, and books? What about concerts or off-campus outings? Setting clear expectations now helps your child develop responsibility and confidence—and encourages them to save from any summer job earnings.
3. Discuss Debit vs. Credit Cards
Help your child understand the difference, and set clear guidelines:
- Debit cards are useful for everyday spending and easier to manage when learning to budget.
- Credit cards (with a low limit and co-signer) can help build credit and are often safer for online purchases such as flights or emergencies.
Teach the importance of paying credit balances off in full, avoiding late fees, and recognizing that interest adds up fast. Also, warn them about the barrage of credit card offers they’ll soon receive—and the power of saying no to those free T-shirts.
4. Open a Roth IRA (If They’re Working)
If your student has earned income from a job, consider opening a Roth IRA and investing in a diversified index fund. Contributions grow tax-free and can be withdrawn in retirement—or even earlier for qualified expenses. It’s a brilliant head start on long-term wealth building, even with small amounts.
5. Educate Them About Scams and Digital Safety
College students are prime targets for fraud. Go over how to spot phishing emails, fake job offers, and suspicious links. Encourage them to set strong passwords, enable two-factor authentication, and monitor accounts regularly.
6. Review or Add Renter’s Insurance
If your child will live in a dorm or apartment, make sure their belongings are protected. Your existing homeowner’s policy may extend coverage—but it’s worth confirming. If not, renter’s insurance is typically inexpensive and worthwhile.
7. Clarify Student Loan Responsibilities
If your family is taking on student loans, be transparent about:
- How much is being borrowed
- Who’s responsible for repayment
- When payments begin and how much they will be
Understanding the long-term impact of debt now can help your student make smarter choices later.
8. Set Up Online Banking Access
Make sure your student has full access to online/mobile banking—and that they know how to monitor balances, avoid overdraft fees, and use digital tools to track spending. Depending on your dynamic, you might consider having view-only access to help them stay accountable without hovering.
9. Establish an Emergency Fund
Even a modest emergency fund in a high-yield savings account can be a lifesaver—for unexpected travel, repairs, or technology issues. This teaches the habit of saving for life’s inevitable surprises.
10. Talk About Financial Values, Not Just Dollars
This might be the most important item of all. What does money mean in your family? What does it support—freedom, generosity, security, and independence? Share your stories. Listen to theirs. These conversations plant seeds that go far beyond any budget or bank balance.
Final Thought:
Your child is stepping into a new world—and so are you. These financial and legal steps create structure, but what I believe they really offer is something deeper: peace of mind, empowerment, and a way to stay connected as they take flight.
Important Disclosure: Stephanie Mackara is a Partner, Managing Director at Beacon Pointe Advisors, LLC. The information contained in this article is for general informational purposes only. Opinions referenced are as of the publication date and may be modified due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Past performance is not a guarantee of future results. Beacon Pointe has exercised all reasonable professional care in preparing this information. The information has been obtained from sources we believe to be reliable; however, Beacon Pointe has not independently verified or attested to the accuracy or authenticity of the information. The discussions, outlook, and viewpoints featured are not intended to be investment or legal advice and do not consider specific investment objectives or risk tolerance you may have. All investments involve risks, including the loss of principal. Consult your financial professional for guidance specific to your circumstances.