Help me consider uni costs, please

[GoodNamesOnly]

Looking for some advice on how to save and spend for DCs starting uni.

Child 1 is starting a 4-year course this Sept. Child 2 will probably start in 3 years, so they have 1 year overlap. Child 2 will probably want to do a 4-year degree too. So, they will do 8 years of university including 1 year where they both attend, so it will only be over 7 years.

DC will get the minimum loan and I am hoping to pay accommodation, which is around £200 per week (£8k in first year, £10k in years 2-4). Let's call it 80k for 7 years.

We have £30k in savings (ISA and open access). We save £600 per month between us from our salaries and recently I have been saving an extra £300ish per month in personal account (only up to £1.5k so far, but should have £3k by September). I can earn a bit more with overtime eg £100 per month. So, we could potentially save £1k in a good month where there are few treats and no emergencies. It does require us to be quite frugal and the £300 I have been saving is supposed to be my personal spending money, which I might want or need to keep to myself.

I would hope our salaries will rise over this time, but so will costs, so I am not accounting for any of that. We will definitely need to buy a car (secondhand) and do house repairs. Mortgage is low, but it will go up next year.

By my calculations, £80k over 7 years is £953 per month.

I just wondered how you wise people would work this out. Should we pay for uni accommodation from our monthly income (the up-to-1k savings per month) and retain the money we currently have in an ISA for the difficult year 4 (where they overlap) and other costs like car and house? It would mean we would have to live frugally and were not putting away any extra.

We had children quite young and it's only in the last few years we could start saving. Feel really on the back foot in terms of other parents who have been saving for 18 years! And a bit stupid!

Just remembered we will save about £200 per month when DC1 goes from school dinners, bus fares, pocket money and music lessons.

Hard one, OP. My suggestion would probably avoid using the £30k as much as possible and use it instead as an additional source to top up the accomodation cost. So, if your 30k is currently in a saving account with 4% interest, then you could use the interest to help top up the annual cost of accommodation? So, instead of £10k/year, you need about £8.8k/year or about 740/month. If you do have extra, you could simply add it up to your £30k saving so the interest remains the same (even with a reduced interest rate).

As you need the money ASAP, I dont think investing your £30k in stock and share ISA is worth the risk.

The first thing I would do would be to ensure all your money are in the accounts with the best rates.
I'd do your best to make adjustments and pay from salary and keep the ISA money ticking way earning better interest which you can use to support costs especially in the year they are both at university.
What earning opportunities are there for your children? I did an intense course and couldn't work during term time but worked every summer. My parents couldn't afford to completely top up my maintenance loan to living costs but this bridged the gap without compromising study time. The work experience also helped me get a year in industry placement which was a year where I didn't need financial support from my parents. Are year in industries and options for their degrees?

If you have spare cash each month, I'd try to fund the accommodation costs from that if you can (though beware halls contracts in Y1 which often want payment upfront at the beginning of each term). As you say, there are costs you will save once they're not living at home full time. Then use savings for that double-whammy year in the middle. It sounds like a lot written down over the 7 years, but once it becomes a monthly cost it's more manageable.

That's a very generous strategy. I believe in the 'top up their loan to the maximum' approach, then if they want expensive/ cheap accommodation - it's up to them. Or to top up to have more spends - they need to work in holidays or find some other income source.

How are your pensions? That's a higher priority for spare cash IMO.

Thanks everyone for your input and ideas. To answer a few questions.

Child 1 has a part time job and it is casual, so they should be able to keep it during uni holidays. Not sure yet whether they will have time to work in term time, but I imagine that might come later in the year (if they can find a job), so don't want to rely on it. There is an opportunity to do a placement and this seems to be recommended for future prospects, but also hard to get. Will cross that bridge when we come to it!

As Chewbecca suggests, I had originally expected to top up loan to maximum, but looking at the cost of accommodation, that is not going to be enough. I already ruled out a lot of good options for DC1 because of cost, but they are still going to end up in an expensive place. TBH even the places I know to be cheaper, student rents look ridiculous. @Chewbecca did your strategy work for a current student or a few years ago? It seems loans have not kept pace with rents by a long shot.

Yes, current, though not in an expensive location tbf. I do cover other things like transport to / from, a big shop at the start of term etc.

You mention overtime, are you both already working full time? If not, there is an obvious way of boosting your income. We didn’t save at all for university, wedding contribution, help with paying off student loan and house deposit - just came out of day to day earnings.

Why is your DC only getting the minimum loan? Gov take into account that you have other DC at home to support even if you have high salaries together. Have you used the calculator and ticked the box about dependents at home still?

It sounds very tight to me and personally I think too much to be fully paying all accommodation costs. It’s too late now, but they should have strongly considered commutable uni options/cheaper cities to study.

How do finance calculations work if accommodation costs are split 50/50?

I will have 2 at uni in Sept. We will pay accommodation and phones and they have minimum loan to live off. Child 1 is about to go into 3rd year and costs about 6.5k a year. We don't plan to pay much towards accommodation in placement years as they will hopefully be working. Child 1 spends nowhere near the loan amount, but I'm happy for them to save the money as we can afford it - you don't have to do that. Our food bill will be much lower by the end of Sept too. Hopefully it will be cheaper than you think.