Welcome to student life – now – who can tell me what APR stands for?

Smashed piggy bank
The first letter of the year from school landed on the mat this morning, inviting our daughter to a tutorial about Student Finance. Something tells me it’s not going to involve reminding her to claim her free record token from Our Price or how to cook chili con carne for twelve on a single gas ring. This is going to be a full on Powerpoint presentation on student loans – how to apply for one, what you have to spend it on and how long you have to pay it back. When we left for university all we got was a cheque in the post and a reminder from our older savvier friends not to open an account with Barclays…. Our daughter may not be getting the free university education we got, but I think she will emerge from it better prepared and certainly better educated both academically and financially. Thanks to a combination of benign financial neglect (from me) and an early introduction into book keeping and electronic banking (from her father) she has grown up to be virtually financially self-sufficient as far as clothing and her social life is concerned. She also manages her own phone bills, sends out her own invoices for her part-time job and helps her dance teacher with her accounts. A lot of this is down to her own personality, but it is also a question of learning to function in a far more complicated financial world. My teenage years were spent almost exclusively in a cash economy – if you had a fiver you had the makings of a night out – if you didn’t, you stayed home – simple. Ella has two bank accounts and the means to move money in and out twenty four hours a day and choose, book and pay for a night at the movies without opening her purse once, just by judicious use of a phone. Fortunately, so far, she has inherited enough of her father’s business brain to ensure that she is never tempted to spend more than she has – but will that instinct survive her leaving home? And have we taught her enough about how money works for her to be able to manage paying, not just for her clothes and Christmas presents, but her travel, her food and all her living expenses as well as her all important college social life? Somehow I think she will need more than a tutorial on student finance to see her through, which is why I support Martin Lewis’s  to introduce financial literacy lessons in schools. Not all parents agree – some feel learning about money is a life skill which should be left within the family, others can’t wait to be spared the horrors of explaining how compound interest works – what do you think? Let me know, I’ll be Tweeting on it later!