University is a costly time for students and parents. For various reasons.
For some parents it’s because the children are living out of the home, so you are essentially paying for 2 homes.
For children that are still at home, it’s because the child is now socialising much more, and thus that increases cost of petrol, entertainment, and clothing too ( you have to look the part, right?).
So here are 10 tips to help finance University costs:
1: Parents, start saving early for university. This might be a bit too simplistic, but if you put away £100 a month from the age you child is 5, for 13 years, with a 4% annual interest rate, you’ll have £20,750.29 when they turn 18. When the child is older, make them put a portion of their pocket money into the savings account, to give them some ownership.
2: Make sure you save with compound interest accounts. As per the example above, the 4% was credited to the account every year, at the beginning of the year. So you earn money on the interest from the last year.
3: Compound interest calculations makes a difference. Seriously. If it’s applied annualy at 4% – you’d earn £5150.29 in interest. If you had interest earned ever month, at a far lower rate of 0.5% every month, you’d only earn £16,121.41 in total over 13 years – hardly worth it! So make sure you read the small print.
4: Put the savings in an ISA. So it can’t be taxed, and the interest you earn is all yours. There are Junior ISAs available now too.
5: Teach you kids how to budget BEFORE they leave home. Teach them to watch their money, set aside enough for rent, food and essentials, before they blow the rest on the ‘must have’ mobile or iPad!
6: Teach you kids how to pay bills. Make them pay a mobile bill, or a utility bill every month for a year or two before they leave home. Student living doesn’t have to be difficult if you have the right skills.
7: Teach you kids not to get into debt, and not to rely on credit cards. This should be taught at an early age, and debt awareness should be high on their agenda after they leave home.
8: Get a student loan from the government. Then your child only has to pay it when the earn enough, and it’s a nominal monthly amount which you might be able to help with ( at your discretion). Its the cheapest loan your child will EVER have. There are a lot of student finance packages out there – look for the right one for you.
9: When at University, check on your bank account regularly. Make sure you keep a regular eye on your finances, it’s only too easy to lose track of your spending, and for it to get out of hand. You don’t have the guidance of a parent here, so going a litt;e wild in normally the course, unless you watch your finances!
10: Get a job whilst you are at University! The money will come in handy, and it’ll take up some of your spare time. thus stopping you from spending wildly cos you have time to kill. Best of all – when you finish University, employers are much more likely to hire a person that has worked before and knows what it’s like, than young upstart who only knows ow to party – you’ll be WAY ahead of yor mates, and probably richer too!