Degree or no degree and you can probably work out that spending your last £20 on a night out when you need to buy food and two new text books this week probably isn’t your best decision. It is reported that 75% of new students claim budgeting is their biggest headache.
We’ve put together a very quick and brief guide to helping your child with budgeting.
If you want your child to avoid splurging all their money in the first few weeks and not being able to afford the rail fare home at Christmas, you need to teach them a few of the financial planning basics.
A few top tips from mum and dad could see them on their way to being savvy spenders in no time. You just need to help them work out their budget and download a few helpful apps.
There are a number of free apps which can help with the budgeting burden; Spendometer (free) allows you to set a budget, be it daily, weekly or monthly, and gives you a breakdown and any of overspending. Saying that, there is nothing wrong with the old pen and paper, working out what you can and can’t afford by doing simple money in and out calculations.
If your child is going to have an overdraft, it might be worth reiterating that really it should only be used for emergencies. The amount of money available can be very exciting, but blowing it all in one go might not seem such a good idea when you’re eating beans for every meal at the end of term.
After you have calculated the amount from loans, holiday-job earnings and any money you’re giving them; you need to start considering accommodation.
Halls can cost anywhere between £110 and £130 (and well over £150 per week in London), not forgetting the initial deposit. Whilst the halls of residence might include all bills for the first year, second year in a private rental is likely to cost you even more.
For Freshers who have cars, this is an additional expense to factor in, atop of mobile phones, bills, books, course equipment, laundry costs, insurance, laptops and household essentials. It very quickly begins to add up.
It is important to remember that the student loan is not supposed to last the entire year, but term-time only. You will want to remind your child that they will need to plan for the summer holidays. It is also worth reminding them that they will most likely need to pay the deposit for the next year’s accommodation before they receive the current year’s back.
Food, an essential and it is important to learn how to budget for this as soon as possible. The average student spends £30 to £40 a week on food; whilst initially this doesn’t sound a lot, there are a number of ways to stretch your money without needing regular food parcels or eating cereal for all meals.
If walking or cycling isn’t possible then travelling to and from lectures can be pricey, but often if the journey is considerable the university will offer subsidised travel to and from campus. With regards to longer trips and travelling home, a 16-25 railcard is a godsend; at only £30 you will undoubtedly make this back in savings.
After all these outgoings, they will finally know their disposable income. It’s here where the savers are separated from the shopaholics. Of course, you want them to make the most of university and very often this means spending money. But if they have followed your advice and budgeted right, then this shouldn’t be a problem at all.