With thousands of students preparing to leave home this September, a student money expert has shared five important money lessons parents should discuss with their children before they head off to university.
For many young people, university will be the first time they have had complete control over their own finances. When their student loan lands in their bank account, it can be tempting to see it as money to spend rather than money that needs to last.
Budgeting is key
Learning how to keep track of their money is one of the most important skills a student can have, according to Jake Butler, student money expert at Save the Student. He explains: “Budgeting is always at the basis of financial learning.”
Parents do not need to introduce complicated spreadsheets as it can over complicate things. However, a basic list of money coming in and going out can give students a much clearer picture of what they can actually afford. “Keeping it simple is best,” recommends Butler. “Document what their incomings and outgoings are, and then they can find their shortfall at the end of each month.”
Banking apps can also make things easier, with the likes of Monzo and Starling offering tools to help users keep an eye on their spending.
Understand the loan and extra income
It is also important that students understand what their student loan is actually for. “Depending on how much funding they are eligible for, they could get a few thousand pounds in their account at the start of the term, and it’s important to teach them that it has to cover accommodation, food and living,” says Butler. “When they get their loan payment at the start of each term, advise them to split it up into monthly amounts.”
A student loan may sound like a lot when it first arrives, but it may not be enough to cover all of a student's costs. Butler explains: “For the majority of students, the maintenance loan won’t cover what is needed to get by. Our National Student Money Survey 2025 found that the average maintenance loan from the government will leave a student around £500 a month short.” It is important to make sure you discuss how your child will make the extra money, either by getting help from home or a part time job.
Avoid overspending
From nights out and takeaways to clothes and online shopping, there can be plenty of opportunities for students to overspend. “Borrowing to live outside of their means is stealing from their future,” warns Butler. Parents should make sure their children understand the difference between borrowing responsibly and using credit to fund a lifestyle they cannot afford.
The expert advises: “Teach them how credit cards work and that, if used correctly, how it can help them build their credit score. Also, help them understand that it isn’t free money and that it should be paid off in full every month.” Buy Now, Pay Later services can also make it easy to spend more than intended. “Retailers pay the likes of Klarna to be featured on their website because they know that it increases the amount that someone spends in the checkout,” says Butler.
Meanwhile subscriptions can also add up quickly. The expert recommends: “If students sign up for three or four subscriptions, they are going to have that money coming out of their account monthly, so teaching them how to read the small print and how to set reminders to cancel stuff like that is useful.”
Talk about money openly
It can be tempting for young people to hide financial problems, particularly if they are worried about disappointing their parents. That is why Butler says families should make talking about money a normal part of life before the student leaves home. “The main reason parents should do this is so that their child doesn’t bury their head in the sand [about money]. Some students get into debt because they think ‘I’ll deal with that another time’,” notes Butler.
“If parents are very open and honest with their children about all aspects of money, then it means that those conversations can happen and they can help them with any situation that arises.” The aim is to make sure students know they can ask for help if they find themselves struggling, rather than allowing a small problem to become a much bigger one.
Use student discounts
Once students know how to budget, they can also learn how to cut the cost of some of their everyday spending. There are a number of websites offering deals specifically for students, including Student Beans and UNiDAYS. The expert notes: “Tell your children to sign up to those straight away.” Cashback websites such as TopCashback can also help students get some money back when shopping for essentials.
Meanwhile getting a student bank account is another way to potentially make their money stretch further. “The majority of banks have released their perks for this year, so see what they are offering in terms of 0% overdrafts and incentives like cash, vouchers or perks,” recommends Butler.
