Perhaps you’ve always dreamed of your son or daughter going to University. You may already be aware that tuition fees will be higher than ever from September 2012 onwards, so if you’re serious about sending your children to University, it may be worth setting up a current account for them while they’re still young to get them into the habit of saving money.
Going to University is certainly a landmark in a young person’s life. For many it’s their first experience of living away from home and an opportunity to forge their own way in the ‘big bad world’. This is an important step along the way to adulthood.
While it’s important that your children assert their independence, as parents you feel a responsibility to prepare them for what lies ahead.
Student finances and debt
If your child is going to university, they may get into debt for the first time with a student loan. These loans are low interest and paid back directly from their salary when they earn above a certain threshold. Student loans are generally considered essential for supporting yourself at university especially if they are looking at transferring colleges.
Another common way people get into debt at university is with interest-free overdrafts – which are offered with all kinds of student bank accounts. These overdrafts aren’t interest free forever, and will need to be paid back with interest if they’re not cleared fast enough.
You may want to support your child financially while they’re at university, but they can boost their own student finances as well with a part-time job, with savings – and by being prepared to live within their means.
Student finances and budgeting
While living away from home the first time, budgeting for your own bills is more important than ever before. Food expenses, transport costs, the cost of books and equipment and an active social life are all important expenses for the average student. You might like to prepare your children for the responsibility of managing their own money by showing them how you budget for your own household expenses every month.
If you want peace of mind that they will set aside enough of their money for the bills, there is a bank account which could manage their budget for them, doesn’t have an overdraft and helps them make sure they set aside money for bills every month. The thinkmoney Personal Account can be a helpful budgeting tool for students – or anyone else who wants some help with their finances.
If your child isn’t going to university, it’s still important to help them understand budgeting and managing their current account well – they all fly the nest eventually.
You might still help out financially into their adulthood if they really need it, but if they can rely on their own financial planning, that’s even better.