Bank of Mum and Dad

A new study into student finances from Experian shows that the vast majority of parents - 79% - have to support their children financially while they're at uni, with some families contributing over  £5,000.  More than two-thirds of us have bailed our children out with cash in an emergency.

Empty nest freedom? 

That's hardly surprising, given the recent hike in fees and the rise in accommodation and other living costs. But what's worrying for  parents is that it's hard to put a finger on how much it's all going to cost.  Many parents seriously underestimate how much they'll have to cough up over the next three or four years.   Just as we were hoping to have a bit of spare cash to make the most of this new stage of our lives, we still have to tighten our belts.

Student independence

For students the university years are a stepping stone to full independence, and learning to live within a budget is part of that.   For parents it's a sometimes nerve-racking phase where they have to let their children make their own mistakes, but  always be ready to pick up the pieces if things go pear-shaped.  The dilemma for parents is knowing when to help and when to let your child get on with it.  If a child runs up huge debts, or a vast phone bill,  should we pay off their overdraft?  

Before your child goes to uni it's a good idea to sit down and discuss how much you can afford to help if they can't make ends meet. If they've already gone, find a quiet time when they next come home.   They need to know that while you're willing to help as much as you can, the bank of mum and dad is not a bottomless pit.  They could get a job to supplement their income - ideally in the holidays, not in term time.  

 How you can help your student manage their cash

•  There's no harm in asking how your child's bank balance is going. Just don't go on about it!
•  Make it clear that they can come to you for help without losing face. And that it's best to talk to you before things get out of hand - and they get desperate. 
•  If you do have to bail them out, and it's a situation that could have been avoided,  sit down together and work out  how to prevent it happening again.
•  Go through the budget together, looking at where they could make savings.
•  Make sure they know which big bills they need to keep money back for. The electricity bill can be a nasty surprise if you've never had to pay one before. 
• Think twice about paying for their phone - tempting though it is. Students need to learn how much of their budget a phone -and all the other necessities of life -  take up.