Tina and John have put both of their children to university. But if they each have exactly the same financial aid, the results were completely different. Their daughter ended up with debts of £ 30000, while their son emerged from doing anything at all.
A crucial difference, "says Tina, they gave their daughter a monthly allowance while their son received his money weekly. "When we gave the money to our daughter, it was a great temptation for him - and she spent all of this in a few days," says Tina.
Every year, there is a huge publicity on the financial situation of students - but parents play a crucial role behind the scenes. For each student who ends up in trouble money, then there is probably another who was rescued from the disaster by the actions of their mother or father. Like Tina and John (whose names have been changed), parents want to do the right thing for their children, but often do not know the best way.
The stakes are high. If parents things the way it should be, they can help their children make good money managers for life. If they are wrong, they may see them saddled with debt at the age of 22 and feeling like financial failures before they even get their first job.
The Observer asked the experts for their top tips for parents of students:
Saving
Get your kids to save money at an early age, "says Elaine Cox, a social worker at De Montfort University (which is in the process of putting her own daughter through university). "Encourage them to make savings."
A teenager putting aside £ 20 a week from Saturday job, ends up with more than 1000 pounds in a year. If they have managed themselves, they will not only feel proud of the fact, but they may feel less inclined to spend all at once.
Budgeting
"It's a good idea for parents to help the child take more control and accountability through budgeting," said Cox. A crucial skill - best learned when the child is still at home - is noteworthy their income and expenditure. That debt advisers with their clients, but teaching your children understand basic budgeting in this way could stop them getting into difficulties. "When you write on paper, you can see what's happening very quickly - and your children can see it also," said Cox.
Cash flows
Tina and John were right to conclude that many students manage their money better on a weekly basis that month. Elaine Cox recommends that parents and the students on what the student can afford each week, and the student then takes the money (and not more) on an ATM on the same day each week. "If they live on this point, they are going to manage it," she says.
A credit card is "definitely not," she says, as well as maps of the store. A credit limit of 500 pounds on a map may seem innocuous, but Cox has seen this type of arrangement "soon add up to thousands of pounds" when students exceed the limit, it is extended, and then incurring penalties and interest charges.
Insurance
Students go to university in general with nearly 4000 pounds worth of equipment, according to specialist insurer Endsleigh. They are more vulnerable to theft, at the beginning of the academic year, when the thieves take advantage of lax security among ingenues financial, and often on foot and to help themselves to new laptop computers, cell phones, iPods and the rest.
Some universities have room to cover the contents (including some in Aberdeen, Surrey and Westminster), but many do not. Parents may be able to cover their children by developing their own political content - or they may suggest buying a separate policy.
Students with cars who need to tell auto insurers when they change address. Insurers can refuse a claim, for example, if a student is no longer living in a large living room (in the parking lot and a safer environment university parking), but living in an apartment in town and parking in an alley.
Tenancies
When students move from a living room in an apartment, the parents are often to be the guarantors of the location - some landlords insist on this point. If you are a guarantor, be sure to see (and, if possible, the apartment or house), that you are responsible for your child or if other tenants default on the rent. Even the wisest course of 20 years will deal with the legal and financial implications of renting a property. Are the names of all the tenants in the market - and not just one or two that ultimately be responsible if the defect others? If the contract is for one year, you can negotiate for it to exclude the summer holidays, if your child is not likely to be in the apartment then? (Obviously, you have more bargaining power in areas where there is an overabundance of rental property.) Does the owner fulfilled all the legal obligations - gas safety certificate and respect for the rental deposit scheme ? Does the equipment provided orderly - and what happens if the washing machine or cook down? How does your child and organize their tenants pay the bills? "You should all have your name on the account," says Anne Morton British Gas. "The account name is the person who is liable to pay."
Getting help
Understand that your child must come to you or university, welfare counselors, if they want to discuss money. When people in difficulty, the turning point is usually when they face this problem.
If your child does not end up in debt, do not despair. Tina and John's daughter got to grips with his problem, reimbursement started when she got a job paid for most of it in a few years and has become a much better money manager.
Funding facts
Fees charged for courses will be £ 3070 in 2007/08. Students can take out a loan from the Society of student loans to pay those costs, they start repaying from the April after graduation (if they earn £ 15,000 or more per year).
Loans for daily life of nearly £ 5085 in 2007/08 (for those studying in London, but not living at home) or £ 3280 (for the other students in the UK who do not live with their parents) are available from the Student Loans Company. Interest is paid at 4.8 per cent per annum. .
Grants 2765 books are available to students whose families have incomes of less than £ 17910. Small scholarships are available where income is less than £ 38330
A crucial difference, "says Tina, they gave their daughter a monthly allowance while their son received his money weekly. "When we gave the money to our daughter, it was a great temptation for him - and she spent all of this in a few days," says Tina.
Every year, there is a huge publicity on the financial situation of students - but parents play a crucial role behind the scenes. For each student who ends up in trouble money, then there is probably another who was rescued from the disaster by the actions of their mother or father. Like Tina and John (whose names have been changed), parents want to do the right thing for their children, but often do not know the best way.
The stakes are high. If parents things the way it should be, they can help their children make good money managers for life. If they are wrong, they may see them saddled with debt at the age of 22 and feeling like financial failures before they even get their first job.
The Observer asked the experts for their top tips for parents of students:
Saving
Get your kids to save money at an early age, "says Elaine Cox, a social worker at De Montfort University (which is in the process of putting her own daughter through university). "Encourage them to make savings."
A teenager putting aside £ 20 a week from Saturday job, ends up with more than 1000 pounds in a year. If they have managed themselves, they will not only feel proud of the fact, but they may feel less inclined to spend all at once.
Budgeting
"It's a good idea for parents to help the child take more control and accountability through budgeting," said Cox. A crucial skill - best learned when the child is still at home - is noteworthy their income and expenditure. That debt advisers with their clients, but teaching your children understand basic budgeting in this way could stop them getting into difficulties. "When you write on paper, you can see what's happening very quickly - and your children can see it also," said Cox.
Cash flows
Tina and John were right to conclude that many students manage their money better on a weekly basis that month. Elaine Cox recommends that parents and the students on what the student can afford each week, and the student then takes the money (and not more) on an ATM on the same day each week. "If they live on this point, they are going to manage it," she says.
A credit card is "definitely not," she says, as well as maps of the store. A credit limit of 500 pounds on a map may seem innocuous, but Cox has seen this type of arrangement "soon add up to thousands of pounds" when students exceed the limit, it is extended, and then incurring penalties and interest charges.
Insurance
Students go to university in general with nearly 4000 pounds worth of equipment, according to specialist insurer Endsleigh. They are more vulnerable to theft, at the beginning of the academic year, when the thieves take advantage of lax security among ingenues financial, and often on foot and to help themselves to new laptop computers, cell phones, iPods and the rest.
Some universities have room to cover the contents (including some in Aberdeen, Surrey and Westminster), but many do not. Parents may be able to cover their children by developing their own political content - or they may suggest buying a separate policy.
Students with cars who need to tell auto insurers when they change address. Insurers can refuse a claim, for example, if a student is no longer living in a large living room (in the parking lot and a safer environment university parking), but living in an apartment in town and parking in an alley.
Tenancies
When students move from a living room in an apartment, the parents are often to be the guarantors of the location - some landlords insist on this point. If you are a guarantor, be sure to see (and, if possible, the apartment or house), that you are responsible for your child or if other tenants default on the rent. Even the wisest course of 20 years will deal with the legal and financial implications of renting a property. Are the names of all the tenants in the market - and not just one or two that ultimately be responsible if the defect others? If the contract is for one year, you can negotiate for it to exclude the summer holidays, if your child is not likely to be in the apartment then? (Obviously, you have more bargaining power in areas where there is an overabundance of rental property.) Does the owner fulfilled all the legal obligations - gas safety certificate and respect for the rental deposit scheme ? Does the equipment provided orderly - and what happens if the washing machine or cook down? How does your child and organize their tenants pay the bills? "You should all have your name on the account," says Anne Morton British Gas. "The account name is the person who is liable to pay."
Getting help
Understand that your child must come to you or university, welfare counselors, if they want to discuss money. When people in difficulty, the turning point is usually when they face this problem.
If your child does not end up in debt, do not despair. Tina and John's daughter got to grips with his problem, reimbursement started when she got a job paid for most of it in a few years and has become a much better money manager.
Funding facts
Fees charged for courses will be £ 3070 in 2007/08. Students can take out a loan from the Society of student loans to pay those costs, they start repaying from the April after graduation (if they earn £ 15,000 or more per year).
Loans for daily life of nearly £ 5085 in 2007/08 (for those studying in London, but not living at home) or £ 3280 (for the other students in the UK who do not live with their parents) are available from the Student Loans Company. Interest is paid at 4.8 per cent per annum. .
Grants 2765 books are available to students whose families have incomes of less than £ 17910. Small scholarships are available where income is less than £ 38330
Labels: budgetting, cash flows, debts, funding, insurance, parents, saving, tenancies
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