Educational, Family Life

Preparing Your Kids Financially for Uni

Are you worried about pushing your kid out of the nest before you’re made sure whether or not they can fly? Alas, it’s a transition every kid has to go through, whether they’re going to uni or not. Here, we’re going to look at whether your kid has really learned everything they need to know, or whether there are a few crash courses you can still introduce them to before they leave. It’s better to be a little overbearing and annoying than to leave your kid at risk of building serious debt.

Start budgeting as soon as possible

The sooner your kid learns this tip, the better it will be for them. Budgeting your money is one of the most effective ways to become smarter about how you spend it. For one, it teaches you to pay proper attention to your incoming and outgoing funds and, as a result, how to prioritise what you’re spending. It can make it much easier to notice and correct bad spending habits. Furthermore, it’s important to construct a budget to make sure they’re making good use of their maintenance loans.  Nowadays, there are lots of apps and free software such as the YNAB app that can help them create and manage a budget, but it’s a good idea to show them how, first.

Find little ways to make money

University can be more expensive than many realise and some are concerned, and perhaps rightfully so, that the maintenance loan your kid gets might not be enough to see them through it all with financial security intact. Keeping on the lookout for free ways of having fun is one step, but many students have a part-time job while still in uni. This isn’t always ideal, desirable, or even very practical for students who don’t have a lot of time outside of their studies. However, there could be less time-intensive ways to make money as shown as sites like Save the Student that could be worth taking a look at. Either way, it’s good to make sure your kid has some experience of the working world before they are independent, as it genuinely gives them a headstart on students who don’t have that advantage.

Use credit responsibly

Too many students have very little idea of how credit works before they leave the home, which can leave them vulnerable to some major mistakes. Teaching your kids about credit as soon as possible is a vital tip to take away from this post. Otherwise, they could end up treating their overdraft as “free money” and end up using it all, only to have to spend over a year paying it back after they leave university. Similarly, teach them about finding student credit cards, but also how to use them responsibly. They’re not there to offer extra money when you have none, but can help you build credit for later life purchases such as a car or a house when they are used with a plan in mind.

They will find a better price

There are a lot more opportunities to save money when spending than you or your soon-to-be student child might realise. The all-mighty student discount will almost always allow them to find goods cheaper than full price, even if it means they have to spend a little more time looking around for it.  It’s not just books, clothes, and eating out they can use the student discount on, either. It works for necessary expenses such as smartphone bills, too, with options like the Smarty Sim available. Teach them to always look for ways to use that student discount. They should also be willing to go used or second-hand when they stand to save a lot of money from it.

Keep an eye out for opportunities to get some extra cash

Aside from making extra money, your kid could also very well be given one. Looking at the potential for bursaries can highlight a lot of opportunities to qualify for some financial help. There may be specific criteria that they may have to meet to receive a bursary, so doing their research for ones applicable to them is wise.

Be prepared for the student debt

University is not free, unfortunately, even if it isn’t immediately costing your kid anything. The average debt for students is around £36,000, which can seem like a crippling figure for most students who can’t expect to make that much in their whole first year of life in the working world. You never know how long it might take to pay off that debt by taking off earnings alone, but there are ways to actively pay it back, too. Payments are typically taken automatically on any given pay period (whenever they get their paycheck.) Repayment of loans starts the year after graduating from uni, but only for those who are earning above a certain salary.

Pic – CC0 License

Look out for fraudsters

In the days before the internet, identity fraud was much less of a concern. Nowadays, however, every time your kid goes online, they could be inadvertently giving someone the keys to their finances. Your kid might well be more net-savvy than you are, but it’s still important to learn about how to stay safe online together. For instance, learning about phishing scams, being careful of putting any details on sites without a web security certificate, and being careful to log out of any terminal that they leave are all important lessons. As is investing in security software for any hardware that they own and use to manage their own finances.

You can’t hold their hand throughout uni if they’re moving away, but you can make sure they’re informed enough to make responsible choices. Of course, sometimes they may need help and you should be willing to offer it if you can, but they have to learn. So, make sure you’re offering more than a piggy bank for them to dip into. Give them real money savvy.

 

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