A third of students would rather ask their parents for money rather than forego nights out, a new study from Nationwide Flex Student has revealed. Two thirds of British parents have had to cut back on their standard of living to pay for their children’s university education, according to the poll.
The study of 500 UK undergraduates across the UK was conducted to find out if students are aware how to budget before they begin living independently at university. Almost seven in ten (69%) said they were taught insufficiently about finance and were ill-prepared for student life, with nearly a third (30%) saying they taught themselves everything they know about how to manage money.
Students polled also admitted that the lack of knowledge around budgeting didn’t stop them from being frivolous with their student loan. Around one in three (29%) said that they spend their entire loan within a few months of receiving it, and just over one in ten (11%) confessed to spending it in the first month. Just a few of the things students admitted to splashing their loan on included;
• Nights out (67%)
• Nice clothes (66%)
• Holidays (30%)
• A car (8%)
Nationwide’s study also surveyed more than 600 parents of past and current students. It revealed that more than two thirds (68%) make up the shortfall themselves, leaving them living a life of austerity and cutting back their standard of living to pay for their children to get a university education.
The cuts to their lifestyle mean savings (34%) and holidays (29%) take a hit, while socialising (25%) is also impacted and treats such as a new car (22%) and even fun expenditures (22%) are all affected.
Almost one in six respondents (15%) borrow money or get in to debt, and one in seven (14%) take a second job or delay early retirement (14%). But with parents estimating the bill for university to be in the region of £2,500 per year, totalling £7,500 for a three year course per child, it’s perhaps not surprising that cutting basic outgoings is essential.
Dan King, Nationwide’s Head of FlexStudent Current Account, said: “University can be an extremely expensive time for parents and students alike and often parents are expected to cover the shortfall, putting them under increased pressure and resulting in tightening their purse strings. For students to manage their own financial situation effectively, they need to understand how finances work and learn to budget, so they can stand on their own two feet.
“From an educational standpoint it’s vital that students are given guidance before and during university life, that’s why Nationwide, as a mutual, has created a student current account that is simple and flexible to use, with an interest-free and fee-free overdraft that puts the student in control. It also comes with a whole range of interactive education support and tools at www.yourstudentmoney.co.uk, helping to ease the pressure financially for both parents and students.”