spend, save or put towrds university fees?!

phebe3 · 29 February 2008 at 10:53AM

Hi, I am looking for some advice. Due to the very sad death of a relative we have been left some money which we have put in an savings account linked to the mortgage at the moment. I wd like to spend some of it (obviously!) on home improvements perhaps...a new carpet etc! I also gave my children £150 each, some to spend and some which they have put in their savings accounts.
My question is, I have one daughter who is due to go ot uni, living in, in Oct, and another child who may go 2 years after that, and a third child age 11. I have heard a lot of conflicting advice about uni loans..do I help them out a lot with this money, do we take out the loans, wd it be better to pay off my q small mortgage (the money we have is not aan enormous amount but we have been madly reducing the mortgage over the last 10 years) I do want to help them out at uni BUT it is their choice to go so I don't feel I should shoulder the whole cost...I am a big believer in learning to manage your finances properly early in life. Shld I see a financial adviser, and how do I find a good one or is that a waste of time/money?
thanks a lot, any advice wd be appreciated.

G-G_4 · 29 February 2008 at 10:56AM

I would put it towards the mortgage to be honest.

If the children get a uni loan then it is usually interest free until they earn over a certain amount? correct me if i'm wrong..

Also, I think if you have to earn your money at uni, you will be much better with money and appreciate it more..

x

r.mac_2 · 29 February 2008 at 11:01AM

hi there

firstly - what a lovely parent you are!

secondly, if i were in your position i would put the money towards the mortgage.

Remember that if you are no longer paying the mortgage, or have a significantly lower mortgage you will be in a better position to help your children should you want/need to when the time comes for them to go to uni.

Liz_the_Whizz · 29 February 2008 at 11:22AM

hi phebe3

Definitely let them take out the student loans - no money to repay until the April after they finish their course (ie start of new financial year), assuming by then they are earning £15k+. And then interest rates far lower than any other loan.

As a lovely parent, you should use your money to strengthen your own long term financial situation, so that you can help out with treats/top ups for them as you feel fit.

I think as you say it is a valuable life lesson for them to be taking responsibility for their own decisions, but also nice to know you are there for them if they get really stuck.

robnye · 29 February 2008 at 11:35AM

nb: student loans do attract interest from day one.......

personally, i would reduce my mortgage, freeing up money, that way I could spend some and save some, with a view to giving my 3dds money when they are 18 but not dependant on whether they go to uni or not.....
my eldest is due to start in oct 08,

phebe3 · 29 February 2008 at 11:48AM

I think it's the word loan which is scarey...we are not a borrowing family unless we really really have had to and I am uncomfortable with it. My daughter is too...she worries about having a loan, and having a huge debt..but I thought I did hear on radio 2 a week or so ago Martin talking about student loans and how how we should perhaps not look on them as scarey LOANS. Cdn't find it on a podcast afterwards unfortunately....

tawse57 · 29 February 2008 at 11:53AM

I would personally reduce the mortgage also. As for the kids going to Uni, well, there are more and more 'experts' arguing whether it makes sense for people to go to Uni these days if, at the end of it, they are walking away with 20 to 30 grand in debt. Once they got that debt they will need to pay it off before they can even begin to think about getting a house.

Would you have been able to have bought your house if you and your husband each had big student debts?

I have been reading more and more articles in financial press about this and how student debt is going to have a big knock-on affect for decades to come re house buying and consumer spending. Also, are employers that impressed with modern graduates?

Just a thought.

Liz_the_Whizz · 29 February 2008 at 12:24PM

phebe3 wrote: »

I think it's the word loan which is scarey...we are not a borrowing family unless we really really have had to and I am uncomfortable with it. My daughter is too...she worries about having a loan, and having a huge debt..but I thought I did hear on radio 2 a week or so ago Martin talking about student loans and how how we should perhaps not look on them as scarey LOANS. Cdn't find it on a podcast afterwards unfortunately....

Phebe,

It is quite daunting, I agree. I work at a university, here's a quick link from the website about coping with student debt, hope it's useful:

http://www.studentnet.manchester.ac.uk/careers/graduates/copingwithgraduatedebt/

phebe3 · 29 February 2008 at 1:03PM

I know what you mean about uni...neither me nor my hubby went and we've done ok (tho he did take degree thru work later on..;the best way to do it and I have done bits of higher ed to get more qulaified throughout my life..but been earning as well)) We find schools and colleges almost indoctrinate kids into going. The senior school was v off with us when in a meeting once we said "IF our children choose to go to uni".they took it for granted we wd be encouraging them to go..which we haven't really. My mmiddle daughter didn't know at 16 you could leave and get a job..she though you HAD to go on to further education! Re the degree and earning...hubby says employers DO look at degrees..depends what you want to do really. Eldest is v acedemic anyway, wants to do maths degree so shd think she will stand a good chance of a job at the end..fingers crossed. Trouble is she doesn't really know what she wants to do so even if didn't go to uni don't know what she wd do.

chesky369 · 29 February 2008 at 1:12PM

The world has become a very much tougher place since you and your husband were in education; young people going to university now have more options open to them, especially if they're like your daughter and have no specific idea of what they want to do in the long run. I'd be happy if young people had more opportunities with apprenticeships and with vocational training, but these seem to be more and more lacking in our society.

poet123 · 29 February 2008 at 1:17PM

I have 2 sons at Uni and whilst we do pay for tuition and rent they have loans to pay for living costs. I feel they need to learn that every choice has a consequence and that if they want to learn to earn they will nned to make some sacrifices along the way. I would pay off the mortgage.

spend, save or put towrds university fees?!

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