Heading off to university is a huge thing (bringing very mixed emotions for us parents!).
At this time of year, teenagers up and down the UK are working towards their A levels, ready to sit their exams shortly and then venture out into the big wide world in September.
When you’re 18, it’s incredibly exciting. For the first time ever, you can go to bed when you want. You can do what you want; go out when you want; eat whatever you want.
And perhaps the biggest change of all, you can spend your money however you choose. Which for someone who might have only had a modest allowance up until now, and maybe some money from a Saturday job, can be a massive thing!
So today I want to talk about 3 key things you can do to help your kids get on better at university and not end up with a financial nightmare, burning through their student loan and ending up with a massive overdraft or other debt on top of what their higher education is already costing.
#1: Sit down and chat with them about their money stuff
I know this sounds obvious and really simple – but SO many parents don’t explain (did yours before you left home?).
Have a chat with them about the money that’ll be coming in from their student loans and any money that you’ll be contributing towards their upkeep.
Together, go through how much it costs for tuition fees, rent, food, travel, books and other bits and pieces, so they understand and appreciate the full picture.
Again, I know this sounds simple but most teenagers have never had to deal with this stuff before and even if they have, they’ve probably never had sole responsibility for managing all their own day-to-day expenses.
How much money they’ve got to spend is likely to depend on your household budget and how much you’re prepared to help fund their time as a student. If your household income is over £50,000 a year, it’s likely they’ll only get a proportion of the maintenance grant which is, after all, a loan.
Yes, it doesn’t need to be paid back until they’ve left university and start earning, but it’s still money that needs repaying at some point. It’s means tested on you, the parents – not on the students themselves – which is a bit unfair really, because if they want to go to university and either you don’t want to have to support them or you’re simply not able to help much financially, this can put you in quite an awkward position.
So it’s important to sit down with them and make sure they understand how much money they’ll have to spend. Go through some rudimentary budgeting with them, so they understand that once their rent is paid and they’ve bought a travel pass and other necessities, they’ve got £50 or £100 a week to spend (or whatever the figure is), just to help them stay on track.
#2: Make it clear that different people are going to have different amounts of money
When I headed off to university, I ended up sharing halls of residence with people who came from quite affluent backgrounds, who’d been to private schools and whose parents were giving them generous allowances to go out and about.
Whereas I (back in the day!) had a grant. I had some money from my parents, but I didn’t have a whole load of surplus income.
So when the others were planning a night out or to go and do stuff that was out of my budget, I had to either not join in or rack up a student overdraft.
It’s really easy to get sucked into keeping up with the Joneses. Of course, as adults, we know this is not a wise thing. But when you’re 18 and you’re straight out of school and everybody else in your halls or flat is going out 3 or 4 or 5 nights a week, you don’t understand why financially it might not make sense for you to do that too.
Obviously there are ways students can boost their spending. They can get a part time job or set up a side hustle on Fiverr or one of the freelance platforms, if they’ve got skills they can monetise. But not all courses allow time for this and ultimately, you can’t spend money that isn’t there.
So it’s just about preparing them to deal financially with new social situations and potentially new friends from very different backgrounds (which goes both ways!), which again many teenagers simply won’t have encountered before.
#3: Get them hunting out the student discounts!
They’re a brilliant thing, student discounts.
If they’re studying in a city that has loads of students, you’ll probably find student discounts all over the place when you start looking for them.
Lots of national chains like Superdrug, Urban Outfitters and H&M give you a discount if you’re a student with student ID, but in each town or city, there are often other places that do it too.
It’s worth getting them into the habit of asking about a student discount when they go into shops and restaurants and cinemas – without feeling embarrassed or shy about asking! – because it really can save them a fair bit. As well as using the various online platforms like StudentBeans, UniDays and Totum where loads of exclusive discounts can be found.
The other thing to chat to them about is doing stuff as a group to keep costs down. If a few of them are moving their stuff from one student house to another, it makes sense to club together and hire a ‘man and van’ to help, rather than doing it on their own. The same goes with deliveries and ordering stuff online together, to save paying multiple delivery charges.
So! Overall, it’s about working with your university-aged kids to give them the key things they NEED to manage their money at university. It’s giving them a fighting start, so they don’t end up damaging their own finances or future credit score by ending up in a load of debt. If they’ll be one of the better off students, it’s about preparing them properly so they don’t get taken advantage of – because it’s easy to be overly generous and offering to pay for their friends too often.
Much of my work is with parents (like me!) of older children, which can be one of hardest financial periods to navigate, when you’re effectively paying out to support two separate households. University isn’t cheap and your family finances have to work harder and more effectively for you than ever before.
If you’d like to have a chat about I can support you to manage and grow your family wealth – maximising every single penny you have coming in, in ways you may never have considered before – just get in touch using the ‘chat with us’ Whatsapp button below.
And I really hope all goes well for them in September!
Until next time,
Claire