We might only be halfway through 2018, but if you have a child starting university next year, you would’ve already started discussing with your child the options at their disposal. Whichever direction they choose to go, now is the perfect time to start preparing them for tertiary life, both financially and practically. Here are some ways you can help them get ready for this big step:
1.Have them set up a personal budget
Often, starting university introduces your child to a whole new level of financial management, especially if they’re living away from home or dealing with lending facilities for the first time. Budgeting is a vital life skill that doesn’t come naturally to everyone, so it’s a good idea for your child to get a bit of practice before they’re bombarded with all the other changes that university brings. Sorted has an easy-to-use online budgeting tool that will help your child identify all their expenses and plan for them accordingly.
2. Check out what the banks are offering
New Zealand’s main banks all have special accounts and lending services for tertiary students, so it pays to shop around for the tertiary package that suits your child the best. Products available include:
- Fee-free transactional accounts
- Low-rate credit cards or debit cards
- Low-interest personal loans
- Interest-free overdrafts
Doing your research now means one less decision to be made when your child is ready to apply for their account.
3.Teach them how to use a credit card
Your child will probably get their first credit card as part of their tertiary banking package, and while it’s a convenient way to pay for day-to-day expenses, it’s easy to forget what’s been spent and let the debt get out of control. Any debt not paid off in full attracts interest, and that means that every subsequent purchase automatically becomes more expensive. It’s important to make your child aware that credit card mistakes can stick with them for a very long time, especially if they end up damaging their credit history. Sorted’s Credit Card Guideis a great place to start.
We also have our own Credit Card Calculator! It’s an easy tool to help plan for repayments
4.Do your research on student loans
If your child intends to get a student loan, it’s worth checking now to make sure that they (and their intended course of study) meet all the required criteria. They should be a New Zealand citizen or resident studying an approved course run by an approved education provider. If they meet the criteria, your child is eligible for a student loan to pay for:
- Course costs
- Course-related costs
- Living costs
It’s important for your child to remember that their student loan debt must be repaid once they start earning over a certain amount each year (currently $19,448 per year, before tax). You can find out everything you need to know at StudyLink.
5.Don’t forget the practical things
Now is a great time to start teaching your child some practical life skills to stretch the money they’ve got. For example, if they’re moving away from home next year, get them experimenting with simple-to-cook, cheap-to-make meals that they can whip up easily, rather than living on a diet of takeaways and noodles. Teach them how to grocery shop once a week with a set list, to avoid expensive impulse purchases. Explore the student discounts and services available to them via their tertiary institution and schemes like StudentCard or UNiDAYS.
By getting on the front foot now, you can look forward to your teen’s first year at University with the confidence that they’re well prepared for an exciting future.
We know that from experience a lot of our client’s children are still enrolled in the “Bank of Mum & Dad” well into their adulthood. Every family has different financial goals, so why would you give the same advice to every family? SurePlan specialises in a holistic financial service takes you to where you want to go and provide the support you need to get there.
