Parents lose complete control of their children’s finances as soon as they fly the nest, but they will still be expected to pick up the pieces, new research has found.
A poll of 4,300 university students and their parents found mums and dads have little idea about their children’s finances once they leave home to study, with seven in ten blinkered parents saying their children don’t have or use a credit card – when in fact 94 per cent of students admit to having one.
As a result of the money troubles, parents are hit with an unexpected cost of £683.30 when a child goes to university as they have to help out with the cost of food, course books and travel.
The study, by Endsleigh, also revealed one in four freshers will spend their first loan installment within a month of receiving it. Sara Newell, Director of Student & Graduate Markets at Endsleigh, said: “Starting university is a life-changing experience – it brings greater independence and a wealth of new social experiences.
“But normal, everyday, apprehensions about fitting in and grasping a new subject can feel much worse when financial anxiety is added into mix. No young person who is preparing to start higher education this autumn should begin term without a basic conversation about money matters.
“Yet our study suggests one in five young people are doing just that – starting their new, independent life having received no money advice at all. We urge parents of young people soon off to university to ensure their child doesn’t fall in to the student money advice gap.”
The study found students are failing to budget properly, with 26 per cent admitting their first student loan instalment lasted less than a month. Another six in ten said it was gone within a couple of months.
And 58 per cent of those students who have a credit card said they have to use it ‘regularly’ or even ‘all the time’ to meet their costs, even though almost half of the parents said their child’s main source of income at university is a student loan.
Around one in five parents even said the biggest negative effect of their children starting university on their life was on their own finances.But many students are going to university with little or no financial advice, with one in five parents saying their children did not receive any.
Five money tips to help Freshers get to grips with finance away from home
1. Have a money chat – talk to someone you trust about basic money management
2. Keep a weekly budget – use it to set monthly spending limits
3. Get covered – protect your precious gadgets from loss and theft
4. Hit the university job shop – be sure you’re in the queue for the best jobs in town to help you enjoy uni with less money worries
5. Check your inventory – make sure you receive and check your inventory. Take photos of your room when you move in and out to avoid deposit disputes