What to teach your kids about money before they leave for university


For many youngsters, the start of university is their first step towards financial freedom, as they take control of their spending, bills and budgets.

This can be a daunting prospect for students, already acclimatising to a new environment, worrying about making friends, and getting on top of their studies.

While freshers week is fast approaching, parents still have time to lay the foundations for good money management.

To help, we have come up with a list of the four essential lessons to teach your children before they fly the nest, from bank accounts to budgeting.

Financial foundations: Parents sending their youngsters to university this September should arm them with money lessons

Financial foundations: Parents sending their youngsters to university this September should arm them with money lessons

Financial foundations: Parents sending their youngsters to university this September should arm them with money lessons

Get a decent bank account

Banks know that once they get students through the door, thanks to inertia they are likely to be customers for a while – if not for life. 

For years now, they have been dangling tempting ‘freebies’ to entice the new crop of customers in. 

It’s no longer free CDs or cinema tickets, banks reel in millennials with Amazon vouchers, tastecards for discounts on dining out and free railcards.

But a decent overdraft is worth far more, as the costs of a bad one will swiftly outweigh any freebies.

Despite the best intentions two thirds of youngsters live in their overdraft, according to new Nationwide Building Society data.

If that wasn’t motivation enough to help them choose the right account – 44 per cent of parents end up picking up the bill for borrowing, so point them in the right direction.

You can read our full round up for more top student accounts and the small print to be careful of when choosing.

But our favourites include Nationwide and HSBC for their bumper £3,000 overdraft and Santander for its four-year rail card.  

The bigger the interest-free overdraft limit, the lower the likelihood students will turn to a credit card and clock up expensive debts.

Teach then about setting up a budget

A whopping 85 per cent of students rely on additional sources of income to their student loan – with 46 per cent coming from family and parents, according to research.

Get them off to a good start by sitting down and making a realistic budget. 

This at least sets them up with the awareness of what their outgoings are before their student loan instalment drops and they head straight out the door and blow the whole lot.

We have a helpful student budget calculator to get you started. 

The table below, of average student spends compiled by MoneySupermarket as part of its student spending report, may also be helpful starting point.

Source: Moneysupermarket

Source: Moneysupermarket

Source: Moneysupermarket

Check if they need insurance?

Once you take into account laptops, expensive smartphones, headphones, smart watches, games consoles and tablets, the value of youngsters’ belongings quickly reaches into the thousands. 

Thieves are wise to this and often target students during freshers week.

If their prized laptop, mobile, or any other belongings get stolen not only will they be very upset but their finances will be dented by having to replace the items. 

Making sure their things are properly protected by insurance should they be lost or stolen is therefore a real long-term money-saver for parents, who are otherwise likely first in line to foot the bill.

Before you sprint to take out a new policy though, check your home insurance documents first.

Up to 80 per cent of students could be covered by their parents’ insurance as their cover will extend to student digs during term time, but make sure you inform them first. 

You may also want to check whether you need to add on accidental damage cover too.

If not insurers such as Endsleigh, recommended by NUS, specialise in student insurance. You could also consider a gadget insurance policy that protects the costliest items to replace – phones and laptops.

Help with budget-friendly recipes

And finally, take the time to teach them a few budget-friendly, simple recipes.

Each year student spending surveys reveal shocking figures for the amount students shell out on convenience food and takeaways. 

Giving your child a few easy-to-follow recipes will help both their bank balance and their health.

Ideally, this will be a combination of things. 

Firstly, teach them how to do your home-cooked favourites. They know these and are likely to be willing to try them out. 

Secondly, teach them a few things to cook that are relatively easy and cheap but can be shared with friends or guests.

Finally, track down some easy and quick recipes that can be knocked up after a night out – avoiding prime takeaway temptation time.

For some inspiration BBC Goodfood’s student section is a great starting point.

If healthy meals are something you want to make sure your child can always afford,  you could also consider a student meal ticket.

Some supermarkets, such as Sainsbury’s and Asda, offer parents special gift cards that can be given to kids and topped up regularly by them.  



Source link