How to Budget to pay for University

If you have children, then perhaps as soon as they are born you might start to worry about the cost of university. As they get older that worry may get more real, particularly if they start to show the potential for being able to go to university. Parents may be aware of the student loan system, the costs of university and things like that and they will also be aware that their generation did not have to pay, which can make the prospect of paying for it scary for many. However, there are ways that you should be able to manage.

Student Loans

A student loan will be available for every student to pay their university fees assuming they have not had one before. This means that you will not have to find this money right away. They will be responsible for making repayments which will be means tested according to how much they earn. This means that parents need not worry so much about this as they will not have to pay for it. They may be concerned about the cost for their children, but it should not have a significant impact as it will come out of their tax code and they may not have to pay it all back as it is written off after a number of decades. The maintenance loan can be more of an issue. This loan is used to cover the costs of accommodation, food and other living expenses and is means tested according to parental income. This means that higher earning parents will be expected to give their children the money for this rather than them being able to borrow the money. Parents will therefore have to consider the costs of this.

Although the parents are paying living expenses for the child before they start university; paying for their food, clothes and things like this, so will be able to just spend the same on this, they will also need to find the money to cover their rent and utilities. This could add up to quite a lot of money and if the parent has more than one child at university at once, then this means they will need to find a lot of money all in one go. This will also happen at a time when child benefits and child tax credits are likely to be stopped, assuming the parents are getting these.

Budgeting

Therefore parents will need to think about where they will get this money from. They should be aware of whether they will be considered to be high earners or not and if they are not, there is a calculator on the government website that can be used to work it all out. It will tell you how much student maintenance loan your child will be eligible for so that you will be able to work out how much you will need to come up with. You will also need some idea of how much rent and other living expenses will be, which you should also be able to calculate. Once you have this figure you will know how much you will need to save up each month in order to have enough money to give to your child. If you start saving when your child is younger, then you will not have to save up so much each month. However, you may want to wait until you are sure that they are going. However, there is no harm in saving as you can always give them the money to use for other things such as the deposit on a home, a car and driving lessons or things like this. It will certainly not be a waste of time.

Of course, in order to save money you may have to cut back on things or earn more. You will need to take a look at your current financial situation and consider whether this will be the case. If you are already saving significant chunks of money, then this might be enough so you need not make any changes. However, if you feel that you need to be saving more, then you will need to look at how you can change your lifestyle in order to get more money that you can save. This is something that can be achieved in different ways.

It is wise to set a budget so that you know what you can spend. Assign money to each area where you have to spend money, including saving for university and then what is left is all you can spend on luxuries. You can work out the figures by looking at what you are spending on things now. If there is not enough money available then you will need to look at ways of increasing your income which could include encouraging your child to get a part-time job so that they can contribute as well.

How to Save up for a Deposit

Whether you are saving for a deposit on a home to rent, a home to buy or something else, it can be quite a difficult task. Trying to come up with a large sum of money is not easy for most people. This means that you will need to change the way that you earn and/or spend in order to make sure that you can save. It can be wise to follow a step by step approach

  • Open a savings account – to start with it is wise to open a savings account which is dedicated to saving up this deposit. This will allow you to have somewhere to collect your money, help you to be able to more easily see it growing and stop you being tempted to spend it. You will also be paid interest on it, which will help you to accumulate money more quickly, even if it just makes a very small difference.
  • Pay off loans – if you have any loans then it could be wise to pay these off before you start, especially if they are quite small but have high interest. Then you will be able to start saving the money that you were paying on interest on the loan.
  • Put money in there when you get paid – when you first get paid it is wise to put some money into the savings account. It can be worth setting up a direct debit to do this. This will mean that you will not be tempted to spend all of your money before you have saved some. It is a good idea to make sure that the amount that you are putting in is a sensible amount. You need to think about how much you can afford, but also put away the biggest amount that you can. It can be a good idea to look back over bank statements to see how much you think you would normally be able to afford and use that figure.
  • Put money in at end of month – at the end of the month you can put any money you have left before being paid into the savings account. This will vary form month to month depending on how much you spend but it could help to add to the amount of savings that you have.
  • Compare prices and spend less – if you want to free up more money to save then you will have to spend less. This might seem very obvious but finding a way to do it may not be so obvious. One way to start is to compare the prices of everything that you are buying and see whether you can buy cheaper items to save money. You may not be prepared to reduce the quality so you may want to make sure that you are getting good value for money. You may still find that you can save money. Perhaps on things such as energy, insurance or even food, you may find that switching to cheaper items could make very little difference with regards to quality but a lot of difference to the cost. Making small savings across many items will make a difference to the amount that you can save and will mean that you will not have to go without anything. You may even find that there are some cheaper things which offer significantly better value for money.
  • Buy less unnecessary items – we all buy some items that are not really necessary. It can be worth thinking hard about everything that you are buying and asking yourself whether you really need it. This could prevent you form buying so many things and therefore help to save money. Obviously, we all like some luxuries and pleasures but the more that you can do without, the quicker you will be able to save up the deposit that you need.
  • Look for ways to earn more – Earning more can really help to give your savings a boost, particularly if you keep your spending at the same level or lower it. This may not be that easy though, but it is still worth thinking about. There are many things that we can do to earn more, but we need to think about whether there is anything that we can do which will enable us to earn more and fit in with our lifestyle. It might be that working more hours is not practical, but we may be able to ask for a pay rise or look for a better paid job. It may be that we need to be at home to look after family but we can some online work. It might be that you do not feel you have enough skills, but that you can earn money doing some online questionnaires. There are earning solution but you will need to look for them.