It might be hard watching your children grow up. And knowing that they’re off to university this year can be terrifying. But, if there’s anything you can do to feel more confident in your child’s ability to face adult life, it’s passing on your worldly wisdom (or ours, to be precise).

There’s one area of life which is almost guaranteed to affect every student at some point during their university life; money.

The good news is that you can both boost their confidence and put your own mind at rest by making sure that they are clued up on the basics of financial responsibility before they go.

And if you don’t know everything about managing money? That’s okay, we won’t tell them that you came to us first!

Budgeting

Making a student loan instalment last until the next one comes in is hardly an easy task. Between nights out, socialising, buying learning supplies and, of course, paying the bills, it can be easy to wonder where that large sum of money has gone in just a matter of weeks.

Talking to your child before they go to uni can help to make sure that they are prepared to confront the temptation to “spend it all at once”. You can teach your child the basics of writing down all their projected expenses and working out how much they will need to cover them. Then you can tackle the issue of how they will use the rest of their money.

Credit

Credit is practically handed to students on a plate when they get to university. Most banks and building societies offer overdraft and credit card facilities as part of their student accounts, which can put students into thousands of pounds worth of debt by the time they finish their course.

It is important to make sure that your children know that the credit they access during their student years will have an impact on their ability to access loans, mortgages and further credit in the future. Failing to make repayments in full and on time now, could be the factor which keeps owning their first home just out of reach.

On top of this, the type of credit they access will also remain on their credit report for up to six years; and accessing money through ‘payday loans’ can cause providers to turn them down in the future, so they are best to be avoided, as a rule of thumb.

Savings

Student loans alone might not provide enough to start putting a portion away into savings, but for those students who work while studying, or who receive extra help from family members, it might be possible to start putting money to one side for the future.

For all students, it is especially important to have a cash reserve to cover emergency costs, such as a broken laptop. This should be a priority for both those surviving solely on loans, as well as those with a little extra income. An emergency fund should be kept in an accessible account, but one which still provides an acceptable interest rate.

Once an emergency fund is in place, any remaining spare cash could be put into a Lifetime ISA, designed to help your child to save up to £4,000 per year toward the deposit on their first home, or which can be saved until retirement. Deposits into these accounts attract a 25% government bonus, effectively giving your child free money.

Being organised

Change is often the only constant in university life. Often students move home at least once each year, without including summers spent back in the spare room at your house. Keeping track of paperwork is vital for both their mental and financial health throughout these times.

It is important that your children know how and why they need to keep their contact details up to date and make sure that utility providers are informed of any changes. That way, they will avoid a situation where bills are not received, go unpaid for a length of time and court action is brought against them.

Financial planning

Seeking financial advice and creating a financial plan is probably the last thing on your child’s mind as they get ready for the next adventure, but it is important that they understand the benefits of thinking critically about how they will use their money and ensure that their money is helping them to reach their goals.

For more information or to introduce your child to the financial planning process, please get in touch with us on 01664 77 88 99.