Student bank accounts and managing their Maintenance Loan

Spendless

Hi
I have a son who will be going into yr3 of his degree in September. He receives the min maintenance loan due to our household income, so we pay his rent (which is inclusive of most bills) for him and leave him his loan to live on. In a recent chat to him about finances, he says what he struggles with the most is getting his money paid in 3 times a year. He says he would find it far easier to budget if his money came in weekly/monthly. Other than self control (or living on an overdraft!)  is there any way he could manage this better?  He does have a small part time job to help with costs but the work has been very sporadic recently. 

warby68

A 2nd account - one for 'collecting' his money, one to spend from at whatever weekly/monthly rate he budgets.

kuratowski

He could put his entire loan into a separate savings account (or even a second current account, that might have better interest anyway).  And then each month transfer a 1/4 of it into his current account, to simulate being paid monthly.  Sometimes self control just needs a little help.

Spendless

Are you allowed a second sole  current account? That's what I wasn't sure of. I'm guessing if you are, it would need to be at 2 separate banks? I have 2 (at the same bank)  but one is in my sole name and the other a joint one. His loan currently goes in to a student account opened up when he first went to Uni. 

kuratowski

Yes having multiple current accounts is allowed.  I think you can only open one student account (with the student perks like free overdraft or railcard etc).  But ordinary current accounts are fine, some people posting on here have dozens!

MDMD

kuratowski said:

Yes having multiple current accounts is allowed.  I think you can only open one student account (with the student perks like free overdraft or railcard etc).  But ordinary current accounts are fine, some people posting on here have dozens!

You are probably only allowed one student account at the same bank. There is nothing to stop you opening more than one at different banks as long as you meet the criteria (unless there is a specific term that requires your student loan to be paid in rather than a generic term about paying x in every month / quarter.

Even when I was a student 20 years ago people had multiple student accounts- they just waved the same offer letter each time.

Shakin_Steve

All sounds a bit convoluted. Simply get him to transfer his maintenance loan to your account and you set up a standing order to pay him monthly. But the best way forward for him is to learn how to budget properly, he will need this skill throughout his life.

Spendless

Shakin_Steve said:

All sounds a bit convoluted. Simply get him to transfer his maintenance loan to your account and you set up a standing order to pay him monthly. But the best way forward for him is to learn how to budget properly, he will need this skill throughout his life.

That might be a way forward to have the money moved to us first. I think I'd struggle if our household salary was only paid in 3 times a year tbh. I can't think of any jobs that are paid that way. Plenty of people have month left at the end of their money, even when paid 12 times a year.

Shakin_Steve

I have no such problems with my son, he's as tight as a ducks wotsit. I think he's probably got more money now than when he first went to uni 😁

jbrassy

Spendless said:

Shakin_Steve said:

All sounds a bit convoluted. Simply get him to transfer his maintenance loan to your account and you set up a standing order to pay him monthly. But the best way forward for him is to learn how to budget properly, he will need this skill throughout his life.

That might be a way forward to have the money moved to us first. I think I'd struggle if our household salary was only paid in 3 times a year tbh. I can't think of any jobs that are paid that way. Plenty of people have month left at the end of their money, even when paid 12 times a year.

Sorry to be brutal, but maybe he just needs to learn to budget better. I was in the same situation as your son at uni. Got the minimum maintenance loan (paid 3 times a year) and my parents paid my rent. I always ended the year in my overdraft, then got a summer job to pay it all off and earn a bit more on top. 

To be honest, I wouldn't worry too much about it. He should teach himself how to budget as most other people have to. I personally came out of uni with a £1000 overdraft, a £5000 career development loan for my masters degree, as well as the £20,000+ student loan from the Government. I don't regret it at all as my student days were probably some of the best I've had in my life and I've paid most of that off (only £3k left of my student loan which I could pay off today if I wanted to). If uni helps your son get a well-paid job, the debt will take care of itself.  

KxMx

I think your son has done well to ask for help when he is struggling, but please don't manage his money for him by having it go into your account, he will learn nothing.

The suggestion of a second bank account puts the solution and responsibility in his hands, which is the best way for him to learn and gain confidence in himself.