If you’re about to wave your teenager off to university, there’s a good chance that money is top of your list of concerns. How are they going to manage their money? Will they be living off baked beans?
We’re here to help. Our money-saving guide to university will help you work what you need to consider and how to talk to your teens about finance.
You need to talk to your teen about how to manage their bills. Make sure direct debits are set up on their rent and things like credit cards (if they’re using them) so they don’t fall behind with payments. Help them come up with a weekly budget to cover day-to-day spending too.
The first term can seem very costly, especially with all the socialising and extra items to buy. ‘It’s worth ensuring there’s enough money in their bank to get them through the first month in case of any delays in receiving loans or grants,’ suggests The National Association of Student Money Advisers (NASMA). A 0% interest-free credit card can come in handy, but make sure it’s paid off at the end of the month to avoid interest charges.
Make sure your teen is reasonably money-savvy and knows where and how to save. Joing the local library (as well as the university library) can be a good start, not just for books but for cheap CD and DVD rental.
‘Encourage them to explore beyond the main shopping centre of their new university town,’ suggests NASMA. ‘There are always cheaper shops, useful for finding bargains on everyday toiletries and one-off treats.’ Markets can also be a great place to save money on food shopping.
What they need before they get there
The first term at university is usually the most expensive, so getting prepared in advance can be a great help. Depending on where they’ll be staying, a second-hand bike (with a good quality lock) could be a great investment, saving money on buses, taxis and petrol. It’s great for staying fit too, so they’ll save money on gym memberships. And if they’re planning on coming home soon, get them to invest in a 16-25 Railcard which gives a 1/3 off of train travel.
Getting a part-time job
It’s a good idea to get a part-time job while at university if money issues are a worry. NASMA suggests asking the college itself. ‘Universities and students’ unions may be able to offer part-time work to students – investigate before starting the course if possible and get ahead of the crowds.’ This also means they’re working with other students so it’s a great way of making friends and being sociable while earning.
Depending on where they get a job, they may be eligible for in-store discounts so it could be a money-saver in more ways than one. In fact, if they’re a bit of a shopper, a job at Topshop, Topman or Miss Selfridge gets you 25% off all Arcadia Group merchandise, plus 20% off at BHS. Staff at Republic, New Look, and The Body Shop get up to 50% off.
Student grants, loans and bursaries
If your teen hasn’t already applied for loans and grants, they should do so as soon as possible as it can take time to process. There’s a full list of grants available at direct.gov.uk. When they get the paperwork back, check that it’s correct and that they’ve been allocated the right amount. If your household income is under £25,000, they should get the full maintenance grant. The Student Loans Company website has an excellent ‘Frequently Asked Questions’ section as well.
Although university costs are expensive, tuition fees are paid by Student Loan Company loans to begin with. Graduates start repaying in the April after graduation and only when they’re earning over £21,000, so there’s time to pay it back. It’s much better value than other ways of covering the cost such as using a loan, credit card or overdraft. Student loans don’t go on credit files and if they have periods of unemployment they won’t have to pay during this time.
NASMA says, ‘If there’s any drop in your household income while they’re studying, make sure they contact the student loans company. A new assessment might result in additional loan/grant funding becoming available.’
Make sure your teen takes advantage of student discounts. Websites like studentbeans.com have lots of offers and freebies and they should ask at the students’ union about other incentives which may be known locally. Get them to sign up to goodtoknow’s cashback partner Quidco to get discounts and cashback on their online shopping as well as vouchers for eating out.
Another invaluable piece of kit is the NUS Extra card. ‘We’ve added a huge amount of discounts over the years,’ says Pete Mercer, vice president of the NUS (National Union of Students). ‘And at just £12 a year, it more than pays for itself. It’s no longer only cinema tickets, burgers and clothes shops – these are still part of it, but you also get discounts on day-to-day expenses including Amazon, Ryman, Staples, trains and buses, mobile phones, broadband and loads of others.’
Where to buy furniture
Student accomodation nearly always comes furnished (and definitely will if they’re living in halls of residence), but you might want to buy a few extra things for your teen’s room. Investigate the local Freecycle or Freegle or group. This is a mailing list that’s updated daily where people offer up items they no longer want for free – as long as you agree to collect them. Each Freecycle or Freegle group is locally managed so you know it’ll be relatively near for collection. You might find furniture for your student house as well as other useful items, from second-hand bikes to sports gear. You can also submit ‘wanted’ emails, requesting items that you’re looking for.
Textbooks can be among the more expensive items to buy. NASMA suggests holding off on buying everything in advance. ‘Don’t rush out to buy new books or equipment straight away. There might be options to buy second-hand from last year’s students, and often universities have deals with equipment providers, particularly where specific materials are needed for the course.’
Chances are they already have a laptop but if it’s a family one or they need a better one, compare prices using a shopbot like Kelkoo or Pricerunner before using a cashback website like Quidco to buy it.
Don’t forget insurance for gadgets either. ‘The average student now takes almost £2,000 of gadgets to university,’ says Pete Mercer, NUS vice president, ‘so it’s worth seeing if everything is covered under the family insurance policy. If not, check out the deals at Endsleigh, a company created specifically for student insurance and whose board is chaired by the NUS President.’
Some of your teen’s items may be covered by the ‘contents away from home’ on your own policy but check that walk-in thefts are covered (as Endsleigh do) e.g. when possessions are stolen in bars, sports changing rooms or halls of residence.
Best mobile phone contracts
Mobile phone bills can quickly rack up and getting stung at the end of the month won’t do the budget any good. Firstly, ask their or your current provider what deals they can provide. Alternatively, websites like mobilephones4students.co.uk can be a godsend as they search all the offers out there to find the best ones suited to students, both contract and pay-as-you-go. Some of their deals include cashback or free gadgets from games consoles to TVs, but check there are no major strings attached.
Sometimes, sim-only deals can work out best, especially as free wifi is increasing so they may not need mobile broadband. Sim card specialist giffgaff.com always has excellent offers, while the smartphone app Onavo can extend data plans without breaking the cap.
Eating on the cheap
Shopping online can help them to stick to a budget. It’s also worth passing on a few basic tips like making sure they compare prices per 100g to work out which is the cheapest and get them to look at different brands. It’s worth stocking up on essentials like pasta, tinned food and even items like toothpaste, making the most of BOGOF and 2 for 1 offers before they go. If your teen isn’t much of a chef, buy them a recipe book with simple, easy one-pot ideas or print out a selection of our cheap, quick and easy student recipes.
Eating out doesn’t have to cost the earth either with plenty of 50% off deals on websites like Quidco.
If things get tough…
Pete Mercer, NUS vice president, says, ‘It’s worth making sure you’re getting all the financial support, government benefits and tax exemptions you’re eligible for. They’re there to help you out if you’re struggling. Be wary of taking out loans or credit cards when money is short. Talk to your students’ union first as they may be able to help you get additional support from the university.’
Make the most of free money-saving apps. The NASMA smartphone helps with budgeting, plus information about funding and useful contact details.