Doing It for the Kids

Financial education, that is! Discussing money is a big taboo in many families and, frankly, it’s uncomfortable. But having “the talk” with children about money management is crucial to their success in life – and yours as a parent.

If there was ever a time to be open and honest about how to manage finances, it’s before your youngsters get off to university. Not sure how to have that discussion? Here’s how to get started with the ‘money management’ conversation and tips for making sure it sticks.

Remember Your Golden Youth?

No, really. Think back to being your child’s age. It’s likely money wasn’t a thought in your mind when you were taking your first steps into adulthood. Like you back then, kids on their way to university these days are experiencing a lot for the first time, including leaving the comfort of having their life managed for them.

They’ve never had a reason to budget… Until now!

To spark the conversation about money with your soon-to-be university student, consider what you needed in terms of financial guidance way back when. Was it a framework for managing money on a day to day basis? Or maybe ideas for how to develop and stick with a budget?

Remember your child is new to this adulting thing and will need (and maybe even appreciate, eventually) what you can teach them before they fly the coop.

Providing the Right Tools

Before your child runs off to university, take the time to draw up a budget with them. You can easily start by using this spreadsheet to break down spending categories in simple terms. Then fill in the appropriate amounts to fit their needs. Don’t forget to talk them through why it's important to keep track of where the money is going each month.

But kids these days may turn up their nose at an “old-school” spreadsheet. In fact, unless it’s accessible on their smartphone, will they even bother?. To make sure they’re actually following your guidance, you could suggest an app like Monzo. It serves the same budgeting purpose, just with a fancier, tech-driven twist.

Budgeting education and tools are a great place to start, but don’t let those do all the heavy lifting. Your student will need coaching along the way, and possibly some direction when things don’t go as planned. And that will certainly happen. Set a date to look over the budget every few months.

Pro Tip - your new university student is likely to be much more receptive to this type of discussion one month before they receive their termly student loan.

Think Past the Budget

Creating and sticking to a budget is a must for university student money management, but there are other things you can do to help your child save here and there.

Student Council Tax discounts may mean there’s no need to pay council tax, so long as students live with other students. It’s automatic for students living in halls of residence but could apply to students in private housing arrangements, too.

And while it shouldn’t be a go-to tool, student overdraft protection is helpful. Many banks offer student accounts that include a 0% overdraft service all the time that they are a student. Having this in place could save quite a few hefty unauthorised overdraft fees.

Getting through the talk about money with your child doesn’t have to be a drag. Focus on putting yourself in their trendy shoes, and give them the guidance, tech and encouragement that you needed when you were their age.

Having a hard time getting the conversation started? We’ve helped a number of clients help plan for their children’s university recently - we’re happy to extend this offer to OnTrack clients free of charge.