Paying for university living expenses

[Inamuddle36]

Hi — I assumed there would be a thread in this topic but I can’t find one.
All going well, our son will start university in the autumn. We are debating between applying for a loan and self-funding his living costs (room, food, books, social life.) We have no idea what is a reasonable amount of money per month (or per term). Excluding housing (which can vary a lot from city to city), can anyone tell me what is a normal amount for a University student to spend on food, social life, etc? If you self-find, do you give your child a fixed amount per month or a lump sum at the start of term or do you top-up as needed (as long as expenses are reasonable)? I would be grateful for guidance!
(Obviously, I know many people don’t have the option to self-find — but I hope everyone with children at university could offer some insight into typical costs.)

@Darbs76

I saved money for my DD's from birth, grandparents sometimes added money, couldn't have managed otherwise

@sparkle17

Do people save up prior to their children going to university or just afford it from their salary. I feel like I might have to start saving now and my children are 6 and 4!

Yes, we were advised to do this back in the late 1990s, so by the time DC were at uni we had good uni funds in place for them.

My daughter is off to university in September and yes, I'm worried she's just going to blow her money in one go - but how will she learn to manage money if she doesn't have the chance?

I think someone mentioned upthread about using a Monzo bank account (other similar accounts are available!), where the app keeps track of spending by category/time etc. My son uses it and really likes it because he can be fully on top of his money, how long it will last, etc. Knowing what you're spending is the first stage of control, to help you make better decisions, especially when you're only half way through the month/term and can see you've only 5 days spending left at current spending rates! It certainly helped my son decide not to keep nipping to the campus Spar shop when he saw how much all the almost daily "convenience" shopping was costing him - a couple of pounds here and there isn't noticeable but adds up to a huge amount (my DS managed to spend nearly £200 in a single month by using a convenience store on campus and buying coffees/sandwiches as opposed to doing proper shopping/cooking in his flat for around a quarter of that!). When you see it in black and white (or on the screen) it makes it real to them.

@gogohm

The amount they would receive if they qualified for the full loan is a good starting point, just over £9k (excl London) my youngest has managed fine on this (made up of money from me, loan and a bursary plus working pt) dd1 is managing on under £7k this year (long story) but her location is cheaper

So are you paying the fees, and using the loan to cover living costs? Also trying to understand how all of this will work !

Simple it's even worse (I am the £150 a week mother)

Xenia, it looks like you are by no means the only one. You have said lots of times that your dc didn’t take loans so I know you haven’t confiscated it and are eeking it out weekly like an 7 year old’s pocket money. That’s the weirdest aspect, not “some people have lots of money”. If I was richer I’d give my kids more too, I would just allow them to budget like adults and not be sneery about eating cheap but perfectly nutritious food.

From our uni fund, we paid rent directly and sent a monthly amount to DC to pay for bills, food, phone, going out etc. We did pay travel (we moved away so a train journey home became a flight home) and stuff like contact lenses and uni gym membership. DC got very good at monthly budgeting and being frugal - I’d be told off for shopping in Tescos rather than Aldi.

Like Xenia, I remember the covenants whereby parents could get a tax break on topping up their children’s grants.

My daughter is off to university in September and yes, I'm worried she's just going to blow her money in one go - but how will she learn to manage money if she doesn't have the chance?

I gave mine monthly money for haircuts, school dinners etc. from when they were young teens and expected them to learn how to manage their own money from then, there were a few hiccups.

Once at university I give them 1/12 of my contribution each month and leave them to manage it. They sort out rent etc. and use money from their jobs too.

I'm genuinely shocked by how micromanaged some of these young adults are!

We paid our kids rent and gave them £450 a month throughout the year. They had plenty of free money and all saved.
They also worked.

A lot of kids could help themselves by working before they go to Uni straight after school. There is a gap of almost 4 months. That's plenty of time to be able to save a few thousand and still have time for a cheap holiday.

Two of my kids don't drink alcohol so that saved them loads and loads of money.

Giving a set amount of money monthly is a good way of passing money on as it can be except from inheritance tax. Obviously that's only useful of you have spare cash.

DH and I were both permanently skint as students, always worrying about patient our rent and hunting around for the cheapest food. Really didn't want DD to have to go through that stress. We both had grants but no parental assistance whatsoever.

DD is in her first year at Uni in Scotland. This year we have paid her halls for the year upfront and I put £60 per week into her bank account. She has also taken out the minimum maintenance loan but has actually not needed to use much of the money, it's still sitting in her bank account. I also pay her mobile phone bill and car insurance.

She transfers the weekly budget she has set for herself from her main bank account into her Monzo account and this has really helped her to learn how to manage with her budgeting.

Now we are looking at buying a flat for her to live in for the next three years. Probably a 3 bed so she can have 2 paying lodgers to help cover the monthly mortgage costs. We will put down the deposit, having worked out that this plus the legal costs etc. will be only very slightly more than the cost of paying her rent for 3 years.

We saved over the years to help fund ds to going to uni, but talking to him about finances it is likely he'll get a loan and keep the most of what we have saved to go towards a house deposit in the future.

I had naively assumed that interest only started being added once students graduated when I was first looking into costs/anticipated parental contribution.....

"What are the interest rates on Plan 2 Student Loans?

Plan 2 interest rates while you're studying
While studying, and until the April after you’ve left your course, the interest rate on your Student Loan is RPI plus 3%.

The RPI rate is usually set every September using the rate from March of the same year."

The rate of interest applicable to March 2022 is 4.5% (RPI of 1.5% + 3%)

Remember though, this figure normally changes every September. RPI in March 2019 was 2.4%, so between September 2019 – August 2020, Student Loan interest accrued at a rate of 5.4%."*

Given the current anticipated retail price increases, our Uni age children could be looking at substantially higher rates in the future

Rate charged basis changes in the April after you've graduated.

Drawing down those loans before you really need them starts interest accruing. Just something to factor in when you're doing the sums and deciding how much to contribute/when to start taking loans.

3 years at Uni compared to the first 3 years of working ?

I know which 3 years I'd like my dc to use to figure out budgeting, get used to doing their own cooking/laundry/cleaning etc.

I think a monthly allowance of the parental contribution is best unless parents are themselves being paid weekly. Lots of my dc's friends have already been on a monthly allowance whilst in school, possibly because it fits in with their parents salaries being paid monthly too.

As for managing money, DS seems to be doing fine managing with termly payments. It helps that they match his rent payments in halls, so that cost goes out pretty quickly. But he's perfectly capable of budgeting for food, transport and socialising over a term.

All of mine have had allowances since they were in primary school. It was weekly then, but moved to monthly in secondary. They've also had part time or summer jobs. So they've learnt to budget gradually - if they've spent all their money on Frappuccinos they can't afford that new t-shirt they want. I think having that mindset from quite early on is important, and translates into having slightly better budgeting skills at university.

Do people save up prior to their children going to university or just afford it from their salary. I feel like I might have to start saving now and my children are 6 and 4!

I can't speak for anyone else, but suspect we aren't unusual in that we didn't have the spare money to be saving when our dc were little. However once we stopped paying for full time childcare, and then more so when we no longer needed wrap around care, we started overpaying the mortgage, so, for most of the years our dc have been at University, we have not been paying out for a mortgage each month. Then, like many others, we are in better places in our careers at this stage in our lives than we were when the dc were little. So, no, saving for University isn't something we did / we were able to do when the dc were little, but things move on and we've been able to afford the parental contribution whilst they were at University. By luck, we've only had one at University at a time - clearly more difficult when your dc are closer in age.

I was totally broke at Uni and it is the last thing I want for mine

I actually thing not having that much money really helps in learning budgeting, and valuing what you save on and what you spend on. I mean, it does depend on what you mean by 'totally broke' of course.

Wow! This sounds so controlling!
We paid our daughters’ accommodation throughout Uni and they had their maintenance loans to live on.
They can only learn to manage their finances by themselves if they’re allowed to!

I think controlling is a bit OTT re this. I have seen a post where a parent said they ordered their student's shop for them each week - which takes it to another level.....
However, no adult has to make their money last for 3 months - we all get paid monthly. I'm not sure why an 18 yr old should be expected to do this.
All our dc are different. I have one who is very careful with money, one somewhere in the middle, and one who is very 'happy go lucky'. They have all been brought up the same way. All had pocket money from when they were little. All had jobs in the 6th form. All had the same conversations with us about costs and income and budgeting etc - but they are different. We didn't want the one who was still hopeless with money to have run out by mid October. We'd have not let him starve, so would have had to bail him out so he would learn nothing. We were however happy for him to last until the next week if he ran out of money, and, gradually, over the first 6 months or so he got better and better. We then could move to monthly. He's good with money now. Not sure it is helping anyone to have them spend 3months money in 3 weeks just at a time they are living on their own for the first time. University is definitely a time to be making your mistakes, but I'd rather they didn't starve whilst doing it.

oh @Inamuddle36, we set up autodeposit for each MONDAY into the kids accounts.
our thought was food first and hopefully less left for binging alcohol by friday.
i'll now rtft and will add extra tricks if any have been missed. my dh and i paid for 3 through uni with them not carrying any loan (kind of).

So reading these, is the general approach that parents pay the fees and then loans are used for living expenses?

@CloudPop

So reading these, is the general approach that parents pay the fees and then loans are used for living expenses?

No, we don’t do this but some people do.

We paid ds’s fees and hall accommodation (non uk resident at time) and gave him £300 per month. He had two decent internships in the summer of years one and two which he used for additional expenses/entertainment etc. Although I think he actually saved most of this money which was useful when he stated work and rented a flat and realised how expensive everyday living is.

@cloudpop. That maybe a mn approach and maybe people doing it differently haven’t posted as much. We don’t do it like that

The MN approach is that students take out a loan for their fees and a maintenance loan. Their parents (if they are lucky enough to have the resources) top the maintenance loan up to the max, often by paying rent on behalf of their DC.

We haven't decided what to do yet. Ds is interested in Durham and that is one of the most expensive accommodation costs because most are collegiate catered.

We’re paying our youngest’s rent and TV licence atm. He doesn’t qualify for full maintenance loan, receives nearly £1,600 per term and so far he’s had a decent amount left at the end.
Depends on the individual though. Ours isn’t massively gregarious, doesn’t drink and enjoys cooking at home.

Thank you for all the helpful comments. I was really just wondering what a reasonable amount would be for “pocket money” (above rent and university food) and am grateful for the anecdotes. It is also very helpful to read the other comments about loans vs paying out of savings (when possible) and also how to disburse money (monthly sounds sensible) and how to encourage sensible budgeting. (I will now explore Monzo!). Lots to think about. Many thanks! If I come to any new insights myself, I will post them here.

We paid rent. She covered living expenses and fees from student loan.

@Libertybear80

We paid rent. She covered living expenses and fees from student loan.

We do the same.