The time to let your children fly the nest and see them off to university may have already come or could be something you’re preparing for in the future. Exciting and daunting as this may seem, preparation is key to ensure both you and your child can financially manoeuvre through the journey as smoothly as possible. This means not having to struggle to find the cash to cover their extra expenses, since in many cases the maintenance loan is only just enough to cover the cost of accommodation. This article is about how to manage yourself financially so you’re prepared to help your children through university.
If your children are still young, then they’re unlikely to know whether they’ll attend university, do an apprenticeship or go straight into working life, but whatever their decision it’s good idea to be prepared. If you still get child benefit, then you could start saving that towards their future further education costs if you can afford to do so. If you invest this money into a savings account, you’d be able to generate interest on it too, as long as you’re not likely to touch it for a number of years.
Top tip: Have you ever considered how much friends and family spend on giving your kids presents that they probably already have or don’t really need? Encouraging them to instead put that into your child’s savings account would help top up that pot of cash.
Don’t forget that for many, paying the full lot of tuition fees and living costs throughout the whole of their child’s university life is not feasible. Student Loans are available that help pay for tuition fees and maintenance. These are repayable at a lower interest rate after he or she completes their course and begins working.
Working with a smaller income
Saving huge chunks of money each month sometimes may not be easy if you’re already on a tight budget and don’t have extra money to put away. Certainly don’t put yourself in a worse position financially in order to have enough saved. Work with what you have and save as much as you can afford – a little goes a long way.
When children begin university life, there are grants from the government that can help with the extra costs. These are means-tested – based on your household income – and don’t have to be paid back. Also, don’t forget to check your kid’s eligibility for a bursary or scholarship.
Another idea is to try raise some cash together. Why not go through their unwanted stuff and consider selling anything they no longer need. If they won’t be needing their room for the next year or more whilst they’re at university, you could rent it out to get some extra money.
The art of budgeting
Something you can do that is beneficial regardless of your income is to teach your children how to budget. Budgeting is essential to ensure their money goes further and gets them into the habit early, a skill that’ll help them throughout adult life as they take on more financial responsibility.
Doing this early and understanding their expenses will help you to understand how much you will need to contribute to support them.
Financial education for your children will pay off in the future, not only for them but also for you. The more your children know about how to budget, the ins and outs of paying interest and more, the more likely they’re to better manage their finances as adults. For more help on finances The National Association of Student Money Advisors is charity that provides advice and information to students about money matters. If you’re children are already at university get them to sign up for their free Noddle credit report and score, read this to find out what being a means for your credit score.
Take a look at your finances
Whilst teaching your children how to budget, it’s worth taking stock of your own finances too. Consider your weekly and monthly costs and how much you’re spending, including your energy bills, mortgage costs, other utility bills and food spend. The small cut backs can help with putting money towards making up any financial shortfalls in their living costs. Whilst they’re away studying, you’ll have one less person in the house, so look at where you could cut back. For example, you might not need a family pack of food or grocery items or the sports channels you’ve subscribed to on satellite TV. Also, consider doing a price comparison for your utility bills, as you could find a cheaper deal.
Consider a buy to let investment
If you’re in a good financial position, you could choose to pay your child’s tuition fees upfront, which would save them paying interest on a student loan later on in life. Or if you have enough money saved you could invest in a buy-to-let property that they could live in with friends or tenants, whose rent could cover mortgage interest costs. Rent can be one of the biggest expenses for students, so it could save them the financial burden. It would also mean an investment for you, which you could pass on to your children.
Before doing so it’s important to take into account all the costs and restrictions that come with buy-to-let properties. There have been some regulatory changes in the past few years that could affect whether it’s a viable option for you or not.
Financially preparing yourself and your children for this new chapter in their life is important, especially with rising tuition fees. If university is the route your child chooses to take, then you’ll want to ensure you’re in the best possible position to support them financially where you can. With a few adjustments to your own finances and some planning ahead, it doesn’t have to be a burden and there are plenty of support options out there.