Setting your teenager up for life after exams

If you have a teenager, then the last few weeks may have been more trying than usual. This is the examination season, with thousands of teens sitting their GCSEs, A levels and other qualifications. Depending on their results, many will go on to university or college, while others will join the world of work for the first time. Now’s the time to teach them about money – and if they’re relying on you to support their further education, you need to be prepared financially. Here’s your essential study guide.



Going to university or college is not cheap. There are two costs involved: tuition fees and living costs. For teenagers starting courses this autumn, tuition fees could be up to £3,375 a year. Those starting next year could pay up to £9,000. On top of this, there will be living costs. As such, it’s important to look into ways of covering these.



Similarly, if they’re starting college soon and you want to help them financially, it will mean dipping into your savings or income. Forward planning works best: if your child is young, regular monthly savings into a cash or shares ISA is a good idea and you can put in as little as £25 a month. Over the long term, investing in shares could be a better option than leaving money in a savings account, and in an ISA all gains are tax-free. Choose a well-established fund which invests in a range of shares and has a good performance record.

If your teenager is planning to go to a university away from home, make sure to check your insurance, as they’ll have expensive computers, other gadgets and possibly bicycles. Better policies include student possessions cover. And if they are renting privately, make sure their deposit is covered by a tenancy deposit protection scheme.



If they are going straight from school to work, your teenager will need to set up a bank account – there are ‘basic’ versions which don’t allow overdrafts - perhaps a good idea. This is probably their first encounter with the taxman: in this tax year (2011-12) they get a personal allowance of £7,475 and will pay tax on their income over this level. Encourage the savings habit: if they start a cash ISA with just a few pounds and pay in regularly, they’ll soon build up a lump sum which the taxman can’t touch.



Before university or the world of work beckons however, many teenagers will want a break. They probably won’t want to bother with things like single trip travel insurance – so it might be up to you to check they take out suitable cover for a holiday or gap year. Sort out their foreign currency too: they will need a debit card to withdraw cash from ATMs and some currency to take with them: buy it before you’re seeing them off at the airport as you’ll get a bad deal at the terminal. And don’t forget travellers’ cheques if you’re not sure how careful your child will be with their possessions - they offer top-notch security.



The author of this article is a part of a digital blogging team who work with brands like M&S Money. The content contained in this article is for information purposes only and should not be used to make any financial decisions.