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A typical SOS from college student to parent used to be pretty simple: Please send money. Nowadays, getting a panicked call from your child can be a bit more complicated: a stolen laptop, an outrageous bank overdraft fee, an over-the-top cell-phone bill, a run-in with the landlord.
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But just as in the old days, such emergencies still hit you, or your kid, in the pocketbook. Take a deep breath and follow our advice, and you'll get through the crisis with a minimum of damage to your wallet and your nerves.
"My laptop is in pieces!" If your child dropped the computer in the bio lab or spilled beer on the smart phone (or dropped the smart phone into the beer), your homeowners-insurance policy should cover the loss or damage as long as your student lives in a dorm. Call your agent to review the specifics of your policy.
To avoid paying a big deductible or filing multiple claims on your homeowners insurance, consider buying separate property coverage for your student's electronic devices. For example, www.safeware.com offers $1,000 worth of coverage on a laptop, with no deductible, for about $70 a year, and $400 worth of coverage on a BlackBerry for about $65 a year, plus a $50 deductible.
Homeowners insurance may not apply if your student moves off campus. In that case, you can pick up a renters policy for $200 to $350 a year.
"I went over the limit on my cell-phone plan!" Let's face it. Asking kids to limit their text messages is like asking them to quit breathing. You might as well hand your student a bill for the extra charges and then upgrade to a cell-phone plan that includes unlimited texting, such as Verizon's Wireless Select, which starts at $60 a month for an individual and $100 for the family plan.
As for voice minutes, you can always bump up the number if the first plan proves too parsimonious. Parents who use their own minutes sparingly will save money by adding their student to a family-share plan.
Or push your kid out of the nest and into a prepaid plan when the current contract expires. That strategy protects you from youthful excess and teaches your student how to budget, says Joseph Pawlikowski, of Goingcellular.com, which reviews cell phones and service plans. "Once the minutes run out, they're gone." Virgin Mobile offers a plan that provides 1,000 voice minutes for $50; for another $20 a month, you get unlimited texting.
Your student may claim to be hopelessly lost without a smart phone, but phones with Web access can actually perform wonders on an as-needed basis. Verizon's GPS-enabled phones, for instance, let your student download VZ Navigator for 24 hours, at $3 a pop -- letting you rest easier when he or she hits the road for an overnight trip.
"I overdrew my account with my debit card!" Contrary to what parents and students believe, many banks cover debit-card overdrafts -- and then exact a fee, typically about $35, for each transaction. Your student may be able to persuade the bank to waive the charge, especially if it's a first-time offense. Some banks, including Bank of America and Wachovia, anticipate that request by building one-time fee forgiveness or a fee refund into their accounts that are aimed at students.
As for the next time (and there will be one), consider having your student switch to a bank that automatically transfers money from savings to checking when the checking account runs dry. Or use a bank, such as ING Direct, that extends a line of credit for the overdraft at the prevailing interest rate. Many students use their debit cards -- which at some schools are linked to their student IDs -- for transactions as small as $1 or $2, according to the Center for Responsible Lending. Better to pay 17% on a $1 overdraft than $35 a pop.
You might ask the kid to try this novel idea: keeping track of the balance. With online accounts, students can eyeball the bottom line from their laptop or use their cell phone to take a peek. Mobile banking requires a Web-enabled phone that supports the bank's system. Fees depend on the cellular plan. Check the bank's Web site and the cell plan to get further details.
Other student-friendly banking features include e-mail or text-message alerts that let account holders know when their balance is low. The alert system came in handy for Genna Salmon, a junior at Oregon State University, when it told her the coffee she had purchased with her debit card would put her bank balance under-water by 75 cents. She zipped over to the bank and added money to her account, sparing herself the frustration of paying that $35 overdraft fee.
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