Going to university will be a major milestone in your children’s life. It’s often seen as the time when they transition from childhood to becoming an adult.
They will probably be moving away from home, and for many it will be their first experience of independent living and having to find their own way in the world.
But with that independence and sense of growing up comes the need to be financially responsible. They will need to manage their money and it’s highly likely they will also have to deal with not having enough to do all the things they may have taken for granted when living at home.
You’ll want to give your children the best possible chance of success, so this article provides you with some simple tips you can share to help them manage their money.
1. Know what things cost and how much money you have
It’s possible that your children may not have a clear idea of the cost of many basic household goods and food. Now they will need to buy these things for themselves, rather than simply finding them in your kitchen as they may have done up to now.
So, a quick refresher on the average price of simple food items such as a loaf of bread, pint of milk, and a packet of tea bags could stand them in good stead. You could also expand on this by showing them the cost of ingredients for a simple meal.
At the same time, you’ll want to help them understand how much money they will actually have to live on each term.
If they are eligible for a maintenance loan to help towards their living costs, this will be paid in three instalments, so they’ll need to be prepared for this.
Otherwise, they may be reliant on their savings, money from any part-time job they might have, and the Bank of Mum and Dad – or other relatives.
It’s worth ensuring they are clear on what they will have, and when they will get it, so they are able to plan ahead.
2. Set up a simple budget
Once your child knows roughly how much they’ll have to spend, a key next step will be to get them used to the idea of budgeting.
Some budgeting tips you might want to suggest could include:
- Setting themselves a weekly spending allowance
- Planning ahead and buying food in bulk where possible
- Checking their bank balance regularly.
You should also encourage them to use an online budgeting app designed for students such as Money Dashboard, Moneyhub, or Splitwise – which is particularly useful if they are sharing accommodation with other students.
3. Find the best bank account
Even with greater consumer awareness and the ease of switching from one account provider to another, your first bank account is often the one you keep throughout your life.
And banks fall over themselves to get new customers.
Banks also view university students as potentially higher earners. Indeed, government research shows that someone with a degree earns as much as 25% more than someone without any further education.
This means that they will make a variety of alluring offers to encourage students to open an account with them – including interest-free overdraft facilities, and cash for opening their account.
Encourage your child to shop around and see which account will give them the best deal. For example, a recent article in the Times highlighted a range of offers from a £100 cash sum to a £2,000 overdraft.
4. Save money by cooking for yourself
Your child’s biggest financial outlay on a week-to-week basis is likely to be food.
Eating out will obviously be an option, and the university is likely to have a canteen offering a cost-effective option. However, individual ingredients will be cheaper than buying pre-prepared ready meals, so the most economical (and healthy) way for them to eat could be to cook for themselves.
As well as saving money, being able to rustle up a simple meal themselves will also stand them in good stead and help make them popular among their friends.
Furthermore, an offer saying “you buy, and I’ll cook” is a great way to get a free meal!
As they will be shopping for themselves, a handy tip you can give them is to visit supermarkets at the end of the day when many items are likely to be discounted.
5. Make the most of student discounts
Many of the shops in university towns and cities will offer student discounts.
Often, these will be accessible with a student union card. Your children should also acquire an official student discount card, giving them access to thousands of discounts on everything from food and clothing to travel.
There are many discount card schemes available, such as Totum, which is an official card issued by the National Union of Students and Unidays – an app that offers a range of discounts on goods such as electrical products and clothing.
If your son or daughter is going to be studying some distance from home, a student railcard should be another top priority for them. A 16-25 railcard currently only costs £30 (as at September 2023) and will save them a third on most train journeys.
6. Earn extra money with a part-time job
Part-time work is a great way to make some extra money. It’s also a good opportunity for your child to gain work experience, develop valuable skills, and meet new people.
As with student discounts, most university towns and cities will be geared up to offer part-time work and the careers office at the university will be able to offer advice and guidance on finding something suitable.
Indeed, many universities actually offer short-term jobs in various roles such as catering and library services.
One tip you’ll want to give your children is to start looking early rather than joining the rush as many other students realise they need extra money to make ends meet.
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If you would like to discuss any aspect of your financial planning please get in touch with us.
This article is for information only. Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances. All contents are based on our understanding of HMRC legislation, which is subject to change.