Advice for 18 year old please

ktk

My daughter is about to turn 18, and will be going to uni in September (if she gets the grades!!). She currently has about £10k in a Halifax Junior ISA (6%), and a bit more in various savings accounts. When she turns 18 the Halifax will transfer her ISA to an adult variable cash ISA. The interest rate on this isn't very good, so I am thinking that she might as well transfer it straight into her Santander 123 account, but I would welcome advice on how to help her manage this money, which she will need soon enough.

Thanks in anticipation.

kidmugsy

She might as well get a decent interest rate, and Santander seems reasonable. She could also keep her eyes open for accounts aimed specifically at new students - often they can be good value.

Has she got the minimum monthly amount going in? Has she put any relevant direct debits (e.g. phone) on the Santander account? Has she got a good credit card (maybe Santander's own)?

Is she sensible enough to manage the money, or is she likely to fritter it all away? £10k would be a lot to spend on learning to be sensible with money.

There is probably one other tip for new students that will always be true. Don't buy everything "they" recommend.

(i) Not every textbook need be bought - use the library, or share purchases with a friend. Even if you do want to buy, look at second hand purchases, being careful to check that you're getting the right edition.
(ii)Don't go to a Freshers' Fair and sign up to every society that sounds interesting: there's no rush, and you won't have time to attend them all anyway.

One last point: when she hears people boasting about how easy they've found it to get along while doing virtually no work, assume them to be liars. Unless she's doing a doss subject in a doss institution, even clever people need to do some work. It's in the nature of things.

Purplesky_2

I suppose that determining how much she knows about her money position from her upbringing would be key to this.

Have you looked at the student loan/grant info with her and worked out a reasonable budget, given cost of halls etc? And otherwise, have you figured out when she should ask for help? The first two semesters and the final year (less money in the last year....... grrr!) are the hardest for learning to budget/budgeting. If she finds herself eating into the 10k, would you want her to stop at say 9k and let you know, so that you can go over the budget together? Also, do you know how much you could afford to give her if necessary?

Does she have reasonable cooking/shopping skills? While she's off between school and uni is the perfect time for her to practise, even if she hasn't before.

Have you shared any nuggets of wisdom? (i.e. 'It's way too easy to pay on a card when drunk, so leave them at home, just go out with cash and remember to separate money for taxis at the beginning of the evening!' or 'Have a lower figure that you don't want to hit in your bank account. If you start to get close, ease off on the spending')

Also, if she doesn't automatically get £500 into the 123, she can go into a branch and ask to withdraw and immediately replace £500 cash so that she can get the benefits.

Natwest used to have a decent student account with a three or five year railcard. They're worth about £70, so it's worth checking, but I remember the accounts were quite cheap and it might be worth having a student account as her 'regular' account and she can transfer money across as required, thus temporarily removing the £10k form her field of vision? That's what I did, had an account with a couple hundred quid in it and no real interest, but it meant an active move to be made to move any more money over

She could also utilise a TSB account at 5% for £2000? Thus getting a bit more interest AND giving her access to some emergency money, in the event that Santander goes down?

Also, student loans can be a real pain. Universities are very understanding (because it happens a LOT) and often defer payments for tuition /accommodation but allow the student to start. Landlords aren't so forgiving, so once everything is set up, try not to move accounts round and things, it just confuses student finance!. And the University will probably have a hardship fund, she might be able to access temporarily (I.e. if she can't access money from Santander for whatever reason).

It might be worth a little venture up to see if you can locate the nearest aldi/lidl/asda/tesco and some of the bus routes and things. I wish I had done that before moving into my place!

I'm sure I'll think of some more stuff overnight, so I might add a little more in the morning.

ktk

Thanks for the advice. She is pretty good and has a sensible head on her shoulders. The fact that she has accrued £10k is a testament to her ability to save!

The Santander account is specifically aimed at students, so doesn't need the DDs and £500 feed, and she gets a railcard.

atush

I have to say, my spendthrift who started 3 years ago and burned thru his savings of 2K quickly, is now an accomplished cook and shopper who buys either the reduced items such as meant and cooks or freezes them immediately, and also buys the 3 for 10s at Morrisons.

He eats very well incl rack of lamb, duck and halibut. And I only give him 50 a week to live on (half what the other students get from their parents lol).

he wasn't as good at shopping and budgeting in his first year as he is now, plus I used to give him up to 65 a week but cut it back this year as he is going to Law school next.

He also asks for things like Football tickets for birthdays and christmas as he can no longer afford them.

AS a side note, I bought his books for him and we always bought second hand when we could.

organic_wanabe

As Purplesky said:

Natwest used to have a decent student account with a three or five year railcard. They're worth about £70, so it's worth checking, but I remember the accounts were quite cheap and it might be worth having a student account as her 'regular' account and she can transfer money across as required, thus temporarily removing the £10k form her field of vision? That's what I did, had an account with a couple hundred quid in it and no real interest, but it meant an active move to be made to move any more money over.

This is what my DS (now 23) did. He has been working in London for over 18 months, on a good salary, but this is still how he operates transferring over from Santander to NatWest as and when required. His free NatWest 5 year Railcard is still valid till September 2015 and has saved him a fortune!

ruudy

atush wrote: »

I have to say, my spendthrift who started 3 years ago and burned thru his savings of 2K quickly, is now an accomplished cook and shopper who buys either the reduced items such as meant and cooks or freezes them immediately, and also buys the 3 for 10s at Morrisons.

He eats very well incl rack of lamb, duck and halibut. And I only give him 50 a week to live on (half what the other students get from their parents lol).

he wasn't as good at shopping and budgeting in his first year as he is now, plus I used to give him up to 65 a week but cut it back this year as he is going to Law school next.

He also asks for things like Football tickets for birthdays and christmas as he can no longer afford them.

AS a side note, I bought his books for him and we always bought second hand when we could.

He's very lucky to have you. My parents gave me Jack and i worked from school through first year Uni in a shop. They charged me 200-250 per month to live with them lol.