How to budget for your children at University
When your kids take the next big step and travel off to university, it's understandable that your mind throws up lots of thoughts, hopes and fears. Will they succeed academically? Will they make friends? Will they feel homesick?
While these are all big questions, financial concerns are even more important. After all, if they don't have the fiscal skills to keep their finances in the black, their university hopes and dreams could be badly affected. The solution? Ensuring they're in the know, at ease and totally ready to tackle their uni finances by helping them learn how to budget.
The biggest barrier to being able to budget and manage money effectively is a lack of knowledge, so it pays to introduce a lot of info and make solid plans before they head to halls.
A part time job is a perfect way to ensure this, giving soon-to-be undergraduates a taste of managing their own money before thousands of pounds of student loans and grants are suddenly lumped in their accounts – this sort of seemingly positive shock can be a double-edged sword.
The work doesn't have to be applicable to their studies, but simply a means to gain an income that they can then use to start learning the tos and fros of financial management and the worth of money; whilst learning how to budget so they can enjoy going out and meeting friends.
A year out
Encouraging your child to take a year out before uni can have a similar effect as it can help them to budget on a shoestring while travelling, or understanding the process of budgeting and paying a portion of their earnings towards "rent" (bills, food and so on) when they're at home.
Go through the costs
Before they leave the comfort of the suburbs and venture into a totally new city, you should sit down with your child and try and work out how much everything will cost each month. Trust us – they'll feel a mixture of surprise and shock when they find out the true price of independent living!
Draw up a budget that takes into account rental payments, food, laundry, materials and entertainment (plus give a fair leeway for the fun-packed freshers period), guaranteeing that you both have a straightforward understanding of what will need to be paid and when.
Once you know what the expenses are going to be, tot up the student loan and maintenance grant income, plus any bursaries or grants that your son or daughter might be applicable for.
If the sums don't add up, part time or weekend work is a good way for your child to gain a little more income to make up the shortfall, but be careful – UCAS recommend that students shouldn't be employed more than 15 hours a week, or their studies could be impacted.
It might also make sense to choose a cheaper accommodation option. It's a well-known fact that shared houses are a lot cheaper on a week-by-week basis, compared to university student accommodation.
Once they've left, make sure they download a budgeting app and know when they'll receive student loan and grant payments, helping them to continue budgeting throughout their time at university.
All in all, it pays to ensure your child doesn't go to university thinking that they're backed by an infinite supply of parental cash. This sort of thinking can put you in an uncomfortable position, and later, your children too. Talk through the importance of budgeting and responsible spending – it'll pay dividends later on.
Be ready to support
As much as you try and avoid the inevitable, financial problems can arrive out of nowhere, adding stress on top of the homesickness and educational pressure your son or daughter may already be going through.
It's hard to imagine a graduate that would enjoy their parents breathing down their necks and keeping their fingers on the pulse of their private finances, and it really won't work in your favour (or do any wonders for your parent-child relationship) if you do just that.
Instead, let them know that financial help is available quickly if they need it, but that they need to let you know if things are going badly. Most financial problems are lessened when they're hit head on, early on.
If this doesn't work or apply, online banking services can be used to keep track of spending, which isn't too large an imposition if you're bankrolling a large portion of your kid's living costs.
Create an emergency fund
Whatever your family's income, it pays to put aside a fund to help out when issues strike.
Save a sum that'll cover one or two months' worth of expenses (worked out using the all-encompassing budget you drew up before your child moved out) – this will give your child time to get back on their feet if the worst comes to the worst, gaining extra funds through employment or another form of income.
University can be stressful for both students and their parents, but with the right amount of financial planning, any damaging problems can be tackled or dodged entirely. Approach the issue of money as a team, by helping them learn how to budget, and you'll both come out smiling on graduation day!
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