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1 PREPARING YOUR CHILD FOR UNIVERSTIY: A FINANCIAL GUIDE

PREPARINGYOUR CHILDFOR UNIVERSITY.A FINANCIAL GUIDE

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Seeing your child bid farewell to the family home

and set off for an exciting few years in university

is one of life’s biggest milestones. Alongside the

rollercoaster of emotions comes a flood of financial

questions. How much will all this cost? Is my child

ready to manage their finances? How can I make

sure they don’t waste their money?

Fortunately, while these worries are perfectly

natural, they are mostly unfounded. Young people

heading off to university have the capability to

manage their money well; what they might lack is

the knowledge to help them to do so.

This is where this guide comes in. We will outline

not only what costs you personally need to prepare

for, but also how you can make sure your child has

a good grounding in the monetary skills that will

see them through university and act as a great basis

for financial management in their adult life.

CONTENTS

The basic costs of Universtiy. 3

Tips for helping manage a university budget. 6

Talking to your child about budgeting. 7

Banks and beyond. 9

Away from University: Travel. 10

Tips for cheap student living. 11


“As a mum it was the hardest time of being a parent because I knew they had to learn how to deal with situations on their own.”

LINDA FROM CHESTERFIELD.

TUITION FEES

These can vary massively from one university to the

next. If you are still waiting to hear which university

your child will be attending, this means there will

be large variable in your budget. If you still expect

to pay some or all these fees yourself, the best way

to tackle this is to make sure you’re ready to deal

with the largest possible; this way, if you then end

up paying less, you have extra money to allocate to

other things. However, it is almost certain your child

will receive a Tuition Fee Loan, which is non-income

assessed and pays fees directly to the university or

college in question.

ACCOMMODATION

Next to tuition fees, accommodation will be your

second biggest cost. Again, the price of this can

vary a lot depending on the university in question,

what part of the country your child will be living

in, and whether they will be in university halls or

private housing. If they opt for the former, it is likely

the cost of the accommodation will also include

utilities bills and internet (though do check each

individual university to be sure). In private housing,

however, these bills will need to be factored in. The

good news is that, as a student, your child will be

exempt from Council Tax wherever they live.

COURSE MATERIALS

It’s surprising how easy it is to forget just how much

study materials can cost, outside of laptops and

the like. Which? magazine found that 45 per cent

of first years spent more than expected on study

extras, such as books and art materials. So, begin

your research of typical course texts as early as

possible, as costs, even for individual books, can be

very steep. Some of these will be one-off purchases,

but others may be fairly regular - an English

literature student, for example, will need to buy less

expensive new books regularly.


The best place to start is getting to grips with the basic costs of sending your child to university. It’s up to you whether you do this by yourself or alongside your child - some young adults will be more receptive to working together on a budget if they have had involvement from the beginning, while others will prefer to receive the information that will be relevant to them when it’s ready, essentially being spared the boring bits!

THE BASIC COSTS OF UNIVERSITY


CONTENTS INSURANCE

Laptops, mobile phones, iPods, musical

instruments… A student’s belongings quickly add

up in value. So, you will also need to factor in

contents insurance - even if your child is living in

university halls. Some insurance companies, such

as Endsleigh, offer special student policies that

are low-cost and often offer useful extras, such

as laptop replacement within 24 hours. If they are

planning to take a bike or musical instrument to

university, you may well need to take out additional

cover - check with the provider.

FOOD

The cost of this will be affected by two main factors:

where in the UK your child will be living, and their

level of cooking knowledge. For tips on how to turn

your child into a master of economical cooking, see

the final section.

ENTERTAINMENT

While no parent wants their child to blow their

entire budget on beer, we all want them to have

a good time. A busy social life is part of the

quintessential university experience, and it can add

up, so definitely needs to be regarded as a core

cost. Again, you can get tips for helping your child

make savings in this regard in the final section.

HIDDEN COSTS

TRANSPORT. Whether it’s travelling to gigs,

visiting friends, or coming home for a weekend of

roast dinners and a comfy bed, students do a lot

of travelling on public transport that needs to be

factored in into the overall cost of university.

TV LICENCE. Everyone knows student can’t miss

their daily fix of Neighbours, which means they

need a TV licence - even if they don’t own an

actual TV and will be watching live online. A TV

licence is £145.50.

TOILETRIES. Toothpaste, shower gel, shaving gel,

razors, deodorant, hairspray, moisturiser… The list

goes on and on. Ensure there’s a suitable amount of

money set aside for all those regular expenses that

can easily slip the mind when budgeting.


AVERAGE UK STUDENT LIVING COSTS

It’s no secret that the cost of living varies drastically

in different parts of the UK, which means the price

of things like food, basic essentials and nights out

will hinge, at least in part, on whereabouts your

child ends up. For example, according to the UK’s

National Union of Students, the average annual cost

of student living outside London is £12,056. This

includes rent, food, household goods, insurance,

personal items, travel and leisure. In London, the

same mix of costs comes to £13,521.

UCL/Imperial £14,709

Manchester £12,244

Oxford £14,183

Edinburgh £10,662

Birmingham £13,651

Cardiff £10,400

Leicester £8,695

UNIVERSITYESSENTIALS

(Food, activities and study materials)

RENTIN HALLS

WEEKLYTRAVEL PASS

TOTALWEEKLY

SPENDING

AVERAGE ANNUAL

LIVING COSTS

University College London / Imperial

£155.76 £106 £21.11 £282.87 £14,709

The Universityof Oxford

£155.76 £137 £15.50 £272.75 £14,183

University of Birmingham

£133.00 £121 £8.53 £262.53 £13,651

University of Manchester

£93.63 £131 £10.85 £235.48 £12,244

University of Edinburgh

£83.30 £106 £15.75 £205.05 £10,662

University of Cardiff

£92.75 £94 £13.25 £200.00 £10,400

University of Leicester

£68.22 £91 £8.00 £167.22 £8,695


TIPS FOR HELPING MANAGE A UNIVERSITY BUDGET

“My view is to try and support your children as much as possible financially so they’re not burdened with a debt for the rest of their life. We wanted them to have the best possible experience at university without the worry and burden of having to find money for rent.”

NIGEL FROM LEICESTER.

Naturally, when your children are off to university,

your thoughts turn to their budgets. But you also

need to give careful attention to your own, as

alongside paying fees, it’s common to provide

regular support in terms of covering bills, taking

care of the rent or paying their phone bill. In fact,

the size of any loans or grants your child receives

will take into account your own income. If your

income is large, your child is almost certainly likely

to be offered a smaller loan, meaning you are

expected to contribute the necessarily gap between

the loan and their expenses. Your child might also

need to get a part-time job.

MANAGING YOURUNIVERSITY BUDGET

Here are is a useful checklist for managing your

university budget:

Use the above information to work out the basics costs of sending your child to university, remembering to factor in living costs and associated expenses, as well as the larger and more obvious expenses like tuition fees and rent.

Find out how much of a loan your child will receive, and any other financial assistance, such as scholarships or grants.

Based on these two figures, work out how much are able and willing to contribute.

Decide how to contribute - for instance, you might like to pay for their tuition fees and rent directly, rather than giving them a lump sum and asking them to arrange the payments themselves.

Set aside a little cash each month for emergencies - you never know when unexpected expenses might crop up!

If you want to send money regularly for support, make this into a routine so your child knows exactly when and how much they can expect - essential for managing their own budget effectively. Also make sure you use an easy, reliable method, like our Bank to Bank transfers.

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TALKINGTO YOUR CHILD ABOUT BUDGETING

They may always be your baby, but your child is

now technically an adult. Money can be a difficult

subject to broach, and if your child thinks they

are being bossed around or patronised, they are

unlikely to listen to your advice. Make sure you have

a discussion rather than delivering a lecture, and

position your advice as exactly that - tips that have

worked well for you, which they might find useful to

follow but are not obliged to. It’s also good to share

any funny stories about your own financial scrapes

when you were younger - it’ll help the two of you

relate to one another.

BUDGETING BASICS

Knowledge that may seem second nature to you can

be a complete mystery to your teen, so start with

the basics. If you’re worried about coming across as

patronising by doing so, you can always begin by

asking them how much they know about budgeting

and getting them to explain how they’d put one

together. You can then take things from there.

OUTGOINGS AND INCOMINGS. The foundation

of any budget is a clear, honest look at how much

money is coming in, and how much is coming out.

Usually the aim is that the former doesn’t exceed

the latter, though during student life this can be

particularly difficult; it is always wise to talk your

child through what an overdraft is, how to make

sensible use of it, and its risks.

If you can, work together with your child to make a

list of monthly incomings and outgoings, itemised

as far as possible, but also with a grand total

for each. Alternatively, let them put it together

themselves, then ask to see it to suggest any

additions they may not have considered.

Ask them to subtract their outgoings from their

incomings (the latter should include any support

you will provide). This will show you all if there is

a gap that needs to be filled by additional support

from you, or your child getting a part-time job.

“It’s a learning curve for parents and their offspring – the parents have to learn to let go and the children have to learn to be responsible for their own actions. If all goes smoothly, by the time they have emerged from the slightly protected environment of university, they will be independent, well-rounded young adults ready to stand on their own two feet, and their parents will enjoy a good relationship with them on an equal footing. Communication is key.”

JANE FROM SUFFOLK.

SPLITTING SPENDING MONEY. For many young

adults, going to university will be the first time they

find themselves with a large lump sum. Of course,

the truth is that while it looks large at first glance,

when you consider how long it has to last, it isn’t

very much at all. So, encourage your children to

split this money into monthly and, if possible,

weekly chunks. This way, they’ll avoid blowing all of

their money for entertainment on one (undoubtedly

amazing) night out, and then dipping into cash they

need for food and other essentials to fund more fun.

SPOTTING WHERE THEY CAN SAVE. An itemised

budget is brilliant for spotting where you can

potentially save money. This can include cutting

down on unnecessary expenses (reducing a

clothes budget, for example) and finding smart

ways to avoid spending money - such as taking

books out of the library instead of buying them.

Once they have worked out all the ways to save,

they can then adjust their budget and see where

that leaves them - it might be just a little extra

emergency money, or it could be the train fare

home each term.

LEAVING WIGGLE ROOM FOR AN EMERGENCY.

Encourage your children to set aside some money

each month for emergencies or unexpected

expenses. If possible, get them to roll any unspent

money over into the next month, and in this way

build up a bigger buffer over time. Of course,

unfortunately a student’s budget is often a bit too

tight for this - but it’s good behaviour to encourage

if it’s possible.

REGULAR REVIEWS. Even in adulthood, the

temptation is to create a basic budget and leave

it at that. However, the best budgets are adjusted

slightly each month to account for one-off

expenses and irregular costs. This is a great habit

to get your kids into, because it means they won’t

find themselves caught short in that month where

the world and his wife seems to have their 21st

birthday - and all the presents and parties that

come with it.



BANKSAND BEYOND

BANK CARD BASICS

Take them through the differences between debit

and credit cards. You’ll want to discuss the latter in

particular detail, as credit card debt is very easy to

accrue and often difficult to shift. It may be that your

child decides not to have one - though when used

wisely, they can be useful in emergencies. If you’re

worried that your child isn’t going to be sensible

with a credit card, set one up under your account

and set a limit.

SENDING YOUR SUPPORT

If you plan to send your child regular financial

support, work out a plan for doing so before they

leave. As well as making sure they know how

much they can expect and how often, they need to

understand how they’ll receive it. A good option is

our Bank to Bank service, which is an easy way to

send money directly into your child’s bank account.

It also means you will have a Western Union

account ready for any emergencies that might crop

up, which brings us to our next talking point.

A CONTINGENCY PLAN FOR EMERGENCIES

For parents, the idea of an emergency striking while

your child is hundreds of miles away from home is

upsetting. For children, it probably seems too far

removed from reality to matter - until it happens,

and panic sets in. The good news is that you can

drastically reduce anxiety on both sides by having a

contingency plan in place. Western Union’s Money

in Minutes1 service allows you to send cash to your

child in just a few clicks of a mouse, when they can

then pick up from their nearest Agent location, as

the name suggests, in minutes.

As with budgeting, a lot of financial services seem

intuitive to adults. Debit cards, credit cards, money

transfers - it all feels like second nature. To a

person who is opening up their first adult account,

however, it isn’t at all. Make your child aware of the

associated risks of using a credit card and taking

out a hefty overdraft. They might understand how

they work, but are unlikely to fully understand the

future implications this debt could have.

1 Funds may be delayed or services unavailable based on certain transaction conditions, including amount sent, destination country, currency availability, regulatory issues, identification requirements, Agent location hours, differences in time zones, or selection of delayed options. Additional Restrictions may apply. See terms for details

“Think very carefully about getting a credit card – do you really need one or will a debit card do? An option might be to have a second card on a parent’s credit card account. It’s very easy to spend money on a credit card and very expensive if you can’t pay it all back when due!”JANE FROM SUFFOLK.


AWAY FROM UNIVERSITY: TRAVEL

It’s also worth giving some thought to travel. Most students want to spend at least part of their summers exploring the world, which gives both them and you a little food for thought when it comes to planning your budget.

The first concern is how these trips will be funded

- usually a question of whether you will pay, or if

you child will work and save up (or a combination

of these). Depending on the answer, either you,

your child, or both of you should try to factor this

into your monthly budget - gradually setting money

aside for long-term goals is a good habit for them to

get into. And for you, having more time to build up

the necessary money can only be a good thing.

You also want to get them thinking about how to

manage their money while they’re out there. The

best way is to suggest they make a mini budget,

with their ‘incomings’ being how much they have

to spend for the whole trip, and their ‘outgoings’

things they know they’ll need to spend money on -

gigs, food, trains and the like. They can then spread

out what’s left equally over the weeks/months they

are away as spending money - setting aside some

for emergencies, of course!

Worried about your child losing their cash, or falling prey to thieves? Consider suggesting a TravelWise card to them. Working just like a normal bank card (but without being tied to a bank account), a TravelWise card can be preloaded with the currency of your choice. Your child can then use it to pay for things directly, or to take out cash in the local currency. Nice and reliable, it’s a great choice for travel money, or as a standby for emergencies.

Another emergency money contingency plan

should be put in place here, in case something

happens while they are away - even if it is a simple

as blowing all their cash on a helicopter ride over

the Grand Canyon! To make life easy for both of

you, it is best if this is the same as your standard

system for sending emergency money. With Money

in Minutes1, you can not only send cash in pounds

to your child while they’re at uni, but also send

them local currency wherever they are in the world

in a matter of minutes2.

2 Funds may be delayed or services unavailable based on certain transaction conditions, including amount sent, destination country, currency availability, regulatory issues, identification requirements, Agent location hours, differences in time zones, or selection of delayed options. Additional Restrictions may apply. See terms for details


TIPS FOR CHEAP STUDENT LIVING

Some of the best and most effective financial advice you can give your child before they go to university is simply on how to live cheaply. Temptation abounds to live on easy ready meals and takeaways, to buy all their new friends round after round of drinks at the bar, and to travel across the country to see their favourite band. Furnishing them with a few of the below quick tips from us and parents around the country could save them hundreds of pounds over the course of their university life - and mean they don’t run out of cash a few weeks into their first term!

TIP 1: HOW TO COOK ON A BUDGET

Knowing how to cook cheaply is one of the easiest

and most effective ways of saving money. There

are plenty of good student cookbooks out there, as

well as ones not specifically for students that focus

on nutritious budget food (‘A Girl Called Jack’ is

particularly useful).

Encouraging your child to make (and stick to!)

shopping lists, and take packed lunches or eat at

home as opposed to buying food out each day, is

also a good idea.

“I remember having conversations with my son about things like ‘lentils are very cheap; you can make a bag of lentils go a long way’, and about cooking a chilli and freezing half of it. What I tried to do was encourage him to cook once a week so that he understood how, but also about what cheap meals are, and so he knew that takeaways are a lot more expensive than cooking himself.”

PENNY FROM LEICESTER.

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TIP 2: CLUB IN WITH YOUR HOUSEMATES

Jane from Suffolk advises getting your child to work

with their housemates wherever possible to cook

dinner and sort bills.

“It is more economical to cook for a small group than for everyone to cook individually in terms of food wastage, as well as taking care of electricity/gas bills, so try to work together where possible. It’s more economical for a small group to have a kitty for things that you all use like loo rolls, kitchen roll, cleaning products etc. rather than you all buying your own and having to keep them in your room.”

JANE FROM SUFFOLK.

TIP 3: BUY SECOND-HAND BOOKS AND VISIT THE LIBRARY

Course books can be incredibly expensive - but

there are plenty of ways to reduce the cost.

Introduce your child to second-hand stores both on

the highstreet and online, and encourage them to

use the university library wherever possible.

TIP 4: GET A RAILCARD

Train travel is expensive, and it’s something you can

virtually guarantee your child will be doing a lot of.

Get them to invest in a 16-25 Railcard. They cost £30

for the year, but will slice a third of their train fares,

while some banks will offer them out for free when

opening a current account with them, so be sure to

research your options.

TIP 5: TAKE ADVANTAGE OF STUDENT DISCOUNTS

NUS Extra discount cards give students the chance

to get money off everything from eating out and

takeaways to course books, clothes, and their

weekly shop

TIP 6: CHANGE HOW YOU WATCH TV TO AVOID NEEDING A LICENCE

You need to pay for a TV licence even if you’re

watching programmes online on a laptop, tablet

or other device. However, that’s only the case if

you are watching them as they being aired on TV.

So, avoiding the expense of a TV licence isn’t too

difficult - you just need to stick to watching things

after they are broadcast. Considering that’s how

many teens watch TV anyway, that shouldn’t be

hard.
