Budgeting for University

Help prepare your children for university – Nationwide's Rachel Jensen shares some more of her top tips.

29 August 2012: Going to university is a momentous event for any child and parent. Excitement and apprehension are natural reactions to the thought of your child leaving home; particularly if this is the first time they have lived away. But don’t despair, there are lots of things you can do to help you and your child prepare for this life changing event. Here I offer some useful suggestions to help the process go more smoothly.

Budget

Many of us plan our finances well ahead, saving what we can when we can, for example in a regular savings account like Nationwide’s Flexclusive Regular Saver which is exclusively available to our main current account customers*. Having savings may help to cover the costs of your child’s higher education, especially in view of the changes to the university fee structure. The average salary of a graduate is higher than a non-graduate (Money Saving Expert, 2012) and there are social and cultural benefits of going to university, but this has to be weighed up against the financial commitments involved.

University may be the first time your son or daughter has managed a budget on their own, so it’s probably wise to sit down together to help them prepare their finances. Put together a list of all income and outgoings, including accommodation costs, utility bills, food costs, books, entertainment, transport and clothing. Also, make it clear how much monetary support you are able to provide and discuss how this will be best spent.

Make sure you are aware of any financial support available – there are lots of places where you can check your entitlement. For example you could visit www.direct.gov.uk/studentfinance or What Every Parent Needs to Know about Student Finance.

Bills

This may also be the first time your son or daughter has managed household bills. So to give them an idea of what to expect, go through all the bills they are likely to receive, don’t forget the TV licence, and give a practical example by showing them copies of your household bills. If they are using shared accommodation, make sure they decide who will be looking after which bill as soon as possible.

Additional income

A part time job is a great way to earn extra cash, learn how to take responsibility of personal finances and gain work experience. Talk through the benefits of earning some extra income and discuss putting together a CV. If working in term time isn’t appealing, then working in half term and summer holidays may be a good option.

Consider all accommodation options

University accommodation can be expensive, so make sure you consider all the options. Living further from the town may be cheaper, but remember to factor in transport costs. Private accommodation may be a good option, particularly if friends are also going to the same university and can share rent. But remember to check the contract for any nasty surprises. You may also be asked to act as Guarantor with private accommodation.

Halls of residence may not be the cheapest option, but they are a good way of meeting new friends and getting involved in university life. Many halls of residence are near the university campus too, which can save on the travel costs. Also, make sure you check what is included in the price such as food and utilities.

Food

Some university accommodation provides meals and some are self catered. Whichever you choose, it might be worth providing your child with some basic cooking skills. Buy some cook books and plan some low cost recipes together. This will not only help save money but will help with nutrition too. Perhaps you can even practice some of the recipes together.

Don’t forget to share some of your top tips to prevent waste and save money, such as freezing leftovers, regularly checking use by dates, planning meals in advance and buying long life items such as tinned goods, pasta and rice that won’t perish as quickly. Also buy some cooking equipment to ensure that they have something to cook with, many supermarkets have reasonably priced starter kits.

Cover for personal belongings

Moving your son or daughter’s possessions to student accommodation takes lots of planning, but many forget to ensure that these belongings are adequately protected. With expensive items such as jewellery, cameras, sports equipment and bicycles going with them, it is worth checking whether your home insurance policy covers their belongings at university. If not you may need to take out a new policy to ensure they are covered. At Nationwide, our home insurance covers student belongings at college or university within the British Isles as standard (limits apply)**. Check out our cover here.

Student account

It’s all too easy for students to be drawn to an account based on the freebies it offers. Check comparison sites, such as www.confused.com for the best deals and decide what freebies might be worthwhile, such as a young person’s rail card if your son or daughter will be travelling home regularly. By going through the options together you can choose the right account based on the best rates.

Financial support

If your son or daughter needs advice or guidance while they are at university, they should speak to the university’s financial support team or councillor. Also check out what student finance options are available here.