If you’re a parent with a son or daughter in college or university – or if they are about to start – you may be worried about how they will manage their finances.
Student debt is a major concern for students and their parents alike. It’s been estimated that today’s students will graduate with an average £23,000 of debt, and the yearly increase in this figure is showing no sign of slowing down.
However, with the right balance of help and guidance, you can help to reduce the amount of debt your son or daughter takes on during this important stage of their life.
Financial assistance
Students may be eligible to receive student loans throughout their university education, but these are often not enough to maintain a comfortable standard of living.
Students may be able to take on a part-time job during their studies – but this is not always possible, either due to high competition for suitable jobs in the area or, in some cases, because their hours of study do not realistically allow for much part-time work.
Some parents may be in a position to provide some kind of financial assistance to help them along. Even a small amount each week could make a big difference when it comes to student budgets.
Parents on lower incomes may find their son or daughter is eligible for a Maintenance Grant to assist them during their studies. Click here for official Maintenance Grant information.
Financial education
However, money isn’t the only factor – there’s also money management. People who learn to handle their money wisely at an early age are simply more likely to cope with the financial problems that going to university can bring.
Budgeting
It’s essential that your ‘child’ plans their finances well. How much will they be spending on important things like food and rent each month? How much do they have left over once these essentials have been taken care of? By learning to budget effectively, they can greatly improve their chances of staying on top of their finances and avoid taking on (too much) debt.
Saving
Many people choose to take a ‘gap year’ before university, so they can save up at least some of the funds they’ll need.
Even when they’re at university, putting a small amount of money aside each month might be a good idea. The more money they have put aside, the better they’ll be able to cope with unexpected costs without getting into debt.
Of course, this isn’t always an option – if they are already stretched financially, they may need to put all their available money towards their day-to-day expenses.
Insurance
Insurance is as important for students as it is for anyone else. Endsleigh Insurance estimates that students start university with around £4,000 of belongings, many of which could be too expensive to replace if they were lost or stolen.
However, your son or daughter may be covered by your own home contents insurance, or their university may have its own insurance policy for student halls of residence. Check this before you decide to take out an individual policy.
For more on getting out of debt click here
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