So your child is going to university....Have you had the 'finance' conversation?

Whether your child is preparing to go to university in a few weeks or thinking of going next year, Nick Kelly gives his take on preparing your child financially for their student years.

I can't quite believe that my daughter has already completed her first year at university.  

It doesn't seem that long ago she was shopping to go.  The list seemed endless.  Cutlery, bed sheets, new clothes etc.  But I found as important as all of these essentials was the chat about money, budgeting and how to survive university financially.

The step from living at home to having to pay bills, rent and grocery shopping can be huge.
Here is my 'important conversations' list to use a starting point over the summer and also tips to put them on the right financial footing for their student years.
Understanding credit
It is crucial that your teenager understands credit.  Common misconceptions are:

1. There is no payment obligation
2. You can skip a month
3. It's similar to a debit card.

These are obviously all wrong, but also it's the bigger picture that is often overlooked when at University.
As we know missed payments accrue interest which can result in finances spiralling out of control month on month.  This can have major implications on their credit score for the future.

Budget
This is key for any student.
Force them to ask themselves the questions before buying, Do I really need it?  Can I afford it?
Once they have received their initial loan/other payments the obvious risk is that students spend too much too early.
Help them draw up a weekly budget and teach them how to stick to it.

Increase responsibility for money decisions
By asking your child to open a bank account, pay you rent at home and putting standing orders in place you are helping them a great deal for the months and years ahead.  Direct debits and automated payments are second nature to most of us so make sure your child feels the same.

Part time job
Encouraging your child to find a part time job where possible will help.  Of course the extra money will be of use but it will in turn help with budgeting as they are paid regularly.  A job will give them less time to spend money and will also teach other invaluable skills such as time management and team work.

Student discounts
Freshers' week will be full of offers and promotions, but help your child to find the value in student discounts where it counts.
Visit http://www.nus.org.uk/en/nus-extra/ for details of transport and dining discounts among  others.
Keep an eye out for the best landline and mobile deals ahead of September as well as utility bill tariffs if your child is in a shared house.

Don't step in immediately
Easier said than done but make it clear to your child that you will not just be able to step in and help financially as and when they need it.  Look at some other options, grocery vouchers or other pre paid schemes.

This is an exciting time for your child but can be daunting for us as their parents.
But having these conversations as early as possible will hopefully eliminate potential financial issues from the start.