What can your child do to manage their money at university?
This could be the first time your son/ daughter has had to manage their own money, so they are likely to need some support with this.
Firstly calculate how much money your son/ daughter can get from student finance and family support?
It's worth remembering that how much money your child will get to live on at university will depend on your household income. Any parental household income above £25,000 will reduce a student’s overall funding. So if your household income exceeds this amount, it is worth considering whether you could contribute to your child's living costs support. It is important to be aware that no matter how high or low a parent's household income is - the government does not give students enough money in loans to cover all of their living costs in the vast majority of cases. It is worth considering how much money they will need to spend on food, bills, travel, books and materials and general living costs and comparing it to how much income they will have in student funding and any supplementary income you can give them.
Sitting down with your child and helping them to calculate what their weekly income will be from their loans and any supplementary income is a vital first step on the road to financial stability. Bear in mind that the loans paid to them are paid in termly instalments and the terms often vary in length - so budgeting may be more challenging!
Calculate outgoings for their year approximately
Once you know how much they will get in loans for the year - deduct the accommodation costs - then see how much is left. Then look at the number of weeks between each termly instalment and calculate how much money they will have to live on each week. Is it enough to live on?
Tips for generating income!
If they have an income shortfall then there are some things they can do to prepare for this in order to be able to make ends meet:
- Work part-time throughout the course and/or full-time in the summer vacation period. Most degree courses afford students the flexibility to be able to work part-time alongside their course up to around 15 or 20 hours per week. Students are not usually required to be in university 9-5 Monday - Friday. The vast majority of degree courses are much more flexible. Their lectures, seminars or tutorials may be scattered throughout the week. Some days they may not be required to be in at all. Therefore, as soon as a student knows their timetable and how much study they need to do on top, they can look for part-time work to fit around their studies. This could be a couple of evenings a week, or a couple of mornings or afternoons when they do not have lectures or a Saturday job. Working can also provide good experience to develop extra skills - which could help them be more attractive to employers when they graduate.
- Shop around for accommodation. By far the biggest cost of going to university is the accommodation cost. This can vary significantly depending on where your child chooses to live. On-campus accommodation or city centre accommodation can often be more expensive than a shared student house near to the campus. Don't forget to take account of travel costs however if living off campus. See also Question ‘How much will it cost my child to go to university?’
- Consider whether or not they need to buy every single book on their reading list for each module they are doing. Many universities will provide a reading list which contain some essential set texts that may be worth buying. Many will also add other relevant texts that may compliment their studies, but may not be essential to buy. It is worth them discussing this with their university to see which books are essential and which are just optional. Borrowing the non-essential ones from the university library may be a cheaper option. Look at when in the year they need the books as well. Could some be put on their Xmas present list? Some university societies arrange for students to sell their books when they have finished. You could also look on Ebay.
- Last but by no means least, as it is probably the most important point, teach them how to budget! Budgeting is something we have all learnt through trial and error. Probably more error than trial in many cases! There is a really useful budget calculator here: Which? University student budget calculator.