In this two-part series, I will discuss 7 hidden money traps to avoid; they caught my son his freshman year of college. Trust me, your son doesn’t want to go through the same thing. These traps added much stress on his dad, him, and me and can certainly be avoided if there is awareness that they are out there. The traps ate up all of his savings from summer and Christmas jobs. The first two traps can be found by reading Part 1 of the 7 Hidden Money Traps.
3. Overdraft Fees (the most expensive of the money traps to avoid)
This was a biggie. We had to tweak how to do the bank account over and over. One issue was, we never really knew how much money to give him. The following are the some of the ways that we heard that his friends dealt with money:
- Some had unlimited funds, i.e. their parents’ credit card
- Some lived on a cash-only basis
- Credit cards with small limits
- Some had an allowance but then some expenses went on their parents’ credit card, etc.
- Some received money monthly, bi-weekly, or weekly
The bank account was the single biggest headache of the year. First, we gave him money “for the month.” That lasted one month. It’s too much money to manage at one time for someone who has never lived away from home. At least it was for us. Second, he used a bank that does not have a branch in his college town. So, at first, I would put money in his account, and when he had a low balance, it would take two to three days to get into the account. He was literally at school one weekend, during the fall season, without a penny to his name.
Seriously, Western Union?
That weekend, I had to use Western Union because I couldn’t think of another way to get money to him. He went to a CVS and picked up the cash. I felt sleazy having to send him money that way. They charged $6 for me to send him some cash. Luckily, later, somehow we found out that if you use the banking mobile app on the phone as opposed to the laptop, then the transfer is instant.
I wish I had known that from the beginning!
Third, we had had the account set up in high school with an overdraft cushion, and the debit card still worked when there was no money in the account! This was the bank’s default setting, and it was awful. That is when he accrued the most fees. We had him call the President of the bank and ask for some of the fees back with some stipulations that he had to follow, such as checking his balance on his mobile app. We changed it to where the account would not work if there was no money.
There was one glitch.
Don’t use the credit button (one of the money traps to avoid)
We didn’t know that if he pumped gas and pushed the credit button instead of debit, the card worked even with no money in the account. More overdraft fees. We were all shocked by this. More lessons learned. The banker told us this only happens at gas stations, but I don’t know if this is the case.
This issue was finally worked out as when put him on a weekly budget, had him call us when he was filling up with gas and we put that amount in the account, and told him never to push the credit button.
Cash is King
The last thing that has worked well was his idea. He devised a plan to get the cash out of his account each week, and he lives on the cash instead of his debit card. It does worry me that the money will get stolen, but so far, so good. It took a while to see what would work for him, and this topic is still a work in progress.
**Update: If they join a gym or have another reason to have automatic debits come out of their account, they must keep up with what day of the month this occurs. Also, they need to be aware of any hidden fees. My son had to pay another overdraft fee recently because he didn’t know about a yearly fee at the gym, and he had already pulled out his cash for the week.**
The trap is that they are technically still living off of our money, and yes, he has to pay for the “mistakes” with his own money, but there is still no real urgency to avoid this trap at 18 and 19 years old as opposed to how we feel as adults when we spend our money on “mistakes”. It’s a very costly trap.
4. Cover charges at bars
I went to college at this same University and also went out to the bars and paid cover charges. However, I had NO idea the amount of money that they charge the students today. It is crazy! My son had told us the cover charges were very expensive, but I didn’t believe him until I went myself a few times. Since you can get into most places at the age of 18, they go.
When I visited on football game weekends and parents’ weekends, I quickly saw how easy it is to spend lots of money.
I paid $20-$40 cover charges at different times while visiting there during his freshman year. If you add up the Uber rides, cover charge at one bar, cover charge at sometimes a second destination, and if have a date as well, that is a very expensive night. If it’s a football game weekend or a formal event that requires two nights of this, it is easy to see how quickly the spending adds up.
The lure of this trap is you aren’t going to stay home on a big weekend when everyone else is out. This is one of the money traps that is hard to avoid, so it’s wise to save in other areas to be able to afford this one.
5. Food
Meal plan and fraternity bill
Wait…I thought we paid $1900 first semester for a meal plan (that was required by the University) and $778 second semester for the the Greek Plan. We did. (The University will let you reduce the amount second semester if you join a fraternity in October during Rush.) He pledged a fraternity in October, so we began paying a fraternity bill which also included food, and then the second semester continued with the fraternity bill which provided three meals a day during the week.
That should have been more than enough food money. I understand that you get sick of the same choices on campus over and over, but something else I learned is that there are over 10 restaurants to choose from in several locations.
Apparently, the food at the fraternity houses isn’t the best. So those two food choices–the University and the fraternity house, although I paid for them, “got old.” I cringed every time I saw a charge at a fast food restaurant on his account prior to his going to his cash plan (I can’t see where he is spending money now because of his cash plan.)
Temptations
It is very hard for them to have self-control and force themselves to eat what has been paid for. Additionally, the University doesn’t give refunds on unused funds. Aggravating!
This trap is the oldest trick in the book. When a teenage boy is hungry, he will eat what he wants, when he wants it. Sure, the University requires a meal plan consisting of non-refundable money, and there is food at the frat house. BUT, the lure of the Cookout drive-thru hamburger trumps any of that every time.
Money spent on food was only in our weekend budget for him, so he was behind on his budget often due to spending money on food and leaving free food on the table.
6. Lock-out fees
Dorm lock-out fees are more understandable to me, and they aren’t super expensive. But, I never thought about them prior to seeing them on the bill.
He had about five lock-out fees which totaled $30. Not bad, but the trap was that the fee “just being $5” per lockout fee trumped any urgency to be really sure you were never locked out. Looking back, I’m actually surprised this amount wasn’t larger, but it’s a fee I didn’t think about.
The lure of this trap is that it only costs $5, so “oh well” if they forget their key. Of all of the money traps to avoid, this one is the least expensive.
7. Dorm move-out fines
The dorm move-out fines sent me over the edge when I saw them on the bill.
He was already home for the summer when they posted this fine on the University account. He did not check out with the resident assistant and left his bulletin board and mirror in the room.
The $10 bulletin board turned into a $40 bulletin board that didn’t come home. The $5 mirror turned into a $35 mirror that didn’t come home.
Then there was the fine for not signing out.
This added up to a total of $187.50 for him and $187.50 for his roommate. Hopefully, the University used this extra money to sanitize the mattresses or upgrade something in the dorm.
The trap was either the lure of getting on the road quickly to come home or simply being completely oblivious to the fact that there were fines. This is one of the money traps that is easy to avoid if he will take the time to follow the directions the R.A. gives them.
What were some of the money traps your son encountered? Please comment below.
Go to the top of this article.
Read Laurie’s story of how her recent life experiences led to the birth of this site, White Cotton. Feel free to send her a message or subscribe to the blog.
