On Thursday 18 August, A level results will be revealed, and school leavers will be excitedly preparing to go off to university.
University is a big lifestyle shock. As well as the realisation that washing doesn't do itself, it's probably the first time that your son or daughter will have full control over their own finances. Serving to make this transition harder is that your child may receive lump sums in the form of their student loan as well as having to learn how to budget and to pay bills.
A student bank account is of huge importance in helping your child manage cash flow, and even just surviving from one semester to the next.
As a rule of thumb, don't be fooled by incentives. While free cinema tickets or discounted CDs may sound great, it's not how you should select your bank account.
Remember that, once equipped with a NUS card, your child will already have access to numerous student discounts and freebies.
So once you have steered away from the incentives, what should you be looking for in a student account? Of course, the answer to this will vary from person to person.
A handful of lucky students will be interested in the credit rate of interest, but for most it will be the overdraft facility which is the determining factor.
Halifax offers by far the highest initial overdraft facility, with up to £3,000 available from year one, compared with many others which tier upwards, offering £1K in year one, increasing year-on-year until the third, fourth of fifth years of study.
A specialist student advice service can also be invaluable, and with a branch close at hand – maybe even on campus – it's that much easier to manage your money and speak with your bank.
Year 1 – up to £2,000Year 2 – up to £2,000Year 3 – up to £2,000Year 4 – up to £2,000Year 5 – up to £2,000
Year 1 - £1,400Year 2 - £1,700Year 3 - £2,000
Year 1 onwards - up to £3,000, £500 formal overdraft limit agreed at account opening
Year 1 – up to £3,000Year 2 – up to £3,000Year 3 – up to £3,000Year 4 – up to £3,000Year 5 – up to £3,000
Year 1 - £1,500Year 2 - £1,500Year 3 - £1,500Year 4 - £2,000Year 5 - £2,000Year 6 - £2,000
Year 1 – up to £1,000Year 2 – up to £1,250Year 3 – up to £1,500Year 4 – up to £1,750Year 5 – up to £2,000
Year 1 - £1,000Year 2 - £1,250Year 3 - £1,500Year 4 - £1,800Year 5 - £2,000
Year 1 - £1,000Year 2 - £1,400Year 3 - £1,800Year 4 - £2,000
Source: Moneyfacts.co.uk 12.8.11
Specialist insurance is available for those students living in halls of residence or shared accommodation to protect posessions.
The first big test of your child's money management and budgeting skills will be Fresher's Week. After all, a massive wedge of money sitting in their newly-opened student bank account and a week full of parties is potentially a recipe for disaster!
There will be a clamour for your child's money. Societies they wish to join will have fees to pay; special nights in the Student Union bar may require tickets – not to mention drink tokens! That's before the initial outlay that your child will face buying the books for their study.
After Fresher's Week, your child will still have the rest of the semester to get through, so being prudent will ensure that the money will stretch. Remember – being prudent doesn't mean they can't have fun!
The answer is to set a special Fresher's Week budget – if possible to be paid for from any summer earnings your child has made, rather than by starting to spend that student loan in earnest!
Accept that this budget will be a bit higher- this will be the prime time for your child to make new friends after all, and establish themselves in their new surroundings.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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