Attending university is an exciting period, often marking the first experience of independent living for young adults. A key challenge they face is effectively managing budgets and personal finances.
In this guide, we’ll examine what parents can do to support young adults with budgeting best practices. We’ll also hear the real-life story of Andrew, who helped his two daughters learn to manage their money at university.
Tackling budget challenges at university
Helping young adults manage their finances at university involves encouraging good budgeting practices early on. Andrew emphasises this approach: “Long before they went to uni, I stressed the importance of my daughters thinking about the implications of their spending habits.”
Andrew’s eldest daughter, Olivia, graduated from Edinburgh University in 2023, and his youngest, Amalie, is currently studying at Aberdeen. His support has helped them learn valuable budgeting lessons that can last a lifetime.
“When they were young, I helped them use a pocket money app to encourage them to think about saving money and track their spending,” he explains.
By helping his daughters understand the importance of budgeting, he prepared them for the unique challenges of university life. “University was the first time my daughters received a large amount of money and had to budget for things like living costs on a weekly or term-to-term basis,” says Andrew. “It was definitely a challenge they hadn’t experienced before.”
Andrew realised he needed to help his daughters manage upcoming expenses more effectively. “I noticed that they had taken some expenses for granted, such as music, TV subscriptions and mobile phones, because I’d picked up those costs in the past,” he says.
This insight led him to have more in-depth discussions about budgeting and financial responsibility ensuring Olivia and Amalie were aware of all their expenses. “I showed them how to manage fixed costs on a weekly basis,” he says. “I also helped them think about managing more discretionary spending like leisure activities or going out.”
Managing shared finances while living with other students can be another challenge for young adults at university. “You could have a situation where two flatmates wanted to get a Netflix subscription, but one wouldn’t,” says Andrew. “They hadn’t had to consider these kinds of shared household costs before. This included managing who sets up the account and who’s ultimately responsible for the bill,” he explains.This experience taught them the importance of discussing shared expenses and ensuring everyone is on the same page.
Effective budgeting strategies for university
Budgeting at university can be challenging, so Andrew helped Olivia and Amalie with strategies to manage their finances effectively. “I sat down with them and helped them list their income sources and potential expenses,” says Andrew. “It helped them think about additional costs they hadn’t considered.”
“I also encouraged them to think about their fixed costs and how frequent these are, whether that’s a music subscription or a gym membership. Next, it was about breaking down how much disposable cash they had so they knew how much money they had to spend within a given period,” says Andrew.
Another challenge that Olivia and Amalie faced was making their finances stretch amid rising university living costs. Balancing independence with extra support became crucial. “There were times when they ran out of money and needed to rely on me for financial support for essential things, such as books, a laptop to do their work, or travel to get home,” says Andrew.
“However, I asked that they get a job during holidays and consider working at least one day a week during term time. Their end of the bargain was to contribute to their own university finances where possible,” he explains.
While supporting your child at university is important, Andrew found that young adults benefit from discussing money management with their peers. “Whenever I’ve tried to sit down for a budgeting chat, I’ve been met with some resistance,” he says. “That’s because my daughters are looking for their independence and not for their dad or mum to tell them what to do.”
Encouraging them to talk to friends and seek advice from student services can be effective. “It’s essential to provide kids with tools to learn, stay organised, and be thoughtful about money,” he adds, emphasising a balanced approach to fostering financial independence.
Managing financial worries
Making budgets stretch far enough at university can cause financial worries for young adults. How did Andrew’s daughters overcome these stresses?
“My kids are very different,” says Andrew. “My older daughter, Olivia, was very organised. She planned ahead and never ran out of money. However, my younger daughter, Amalie, always ran out of money initially, but she wasn’t too stressed because I supported them for essential things,” he explains.
“Olivia would be concerned about how much time to commit to a part-time job while at uni while balancing the demands of university coursework,” continues Andrew. “This was especially challenging in the final years of study, where their work ramped up, but their costs hadn’t declined. I think there’s a fine balance between potentially compromising on your degree and taking that extra shift in the local pub,” he says.
Andrew’s university budgeting tips
Given his experiences helping his daughters manage money at university, Andrew has several budget management tips for other parents: “Knowing your committed costs and your money coming in is important,” says Andrew. “You also need to ensure the timing aligns. For example, your rent may be due before your student loan payment arrives, impacting your cash flow,” he explains. “Next, if you’re short on money, consider actions like taking extra shifts at work. It’s also important to think about what costs you can cut back on.”
In summary, Andrew highlights the importance of staying confident and managing stress in university. By budgeting wisely, students can reduce financial worries and focus on enjoying their educational experience. “University should be a great educational experience,” says Andrew. “Having some financial flexibility means you can concentrate on your studies and make the most of your time there without constantly worrying about money.”