Ask Paul: We can pay all costs for our uni student daughter, but should we?


Our oldest daughter will be starting university next year. She will be living with us at home as she is going to study in our home city.

How do you suggest that we teach her about financial independence while still living at home? She will be studying a lot, as she is doing a degree with heavy contact hours. She has a part-time job already.

She is naturally frugal and very helpful around the home, something which I doubt will change. We can afford to subsidise her fully, but feel that will not help her prepare for the independent financial life we wish for her. - Georgina

Ask Paul We can pay all costs for our uni student daughter, but should we

Ha, ha, Georgina, I know exactly what you mean. This is an area where angels fear to tread. But the good news for us both is that you have already done your job, so I can wade in enthusiastically without causing offence.

You have given me a beautiful snapshot of your oldest daughter.

She has obviously committed herself at school to get to university and tellingly she has chosen a "heavy contact" degree in terms of hours. This tells me she is studying engineering, a science-based degree, architecture or one of the degrees I avoided as they looked too hard.

She is naturally frugal (which, incidentally, is not natural - she has followed your lead), has a part-time job and on top of that is helpful around the house. Now that is impressive. Our three kids stack up OK on the earlier attributes your daughter has.

But as they move into their late 20s and early 30s, although we love to see them at home, they still leave the kitchen trashed!

Frankly, I don't think it matters if you subsidise her fully or not. She already has all the hallmarks of a financially independent young woman. Seriously, you have done your job.

I think parents get it really wrong with kids when it comes to self-discipline and self-reliance. If you can afford to, parental help does not hold them back - it lets them grow.

Sure, as we always told our great kids, we're not funding lounging around on the couch doing nothing.

But (despite the state of the kitchen when they visit) we've found that parental support well into their 20s and 30s and a bit of "bank of dad and mum" to help them on the property ladder has assisted their personal and career growth, not hindered it.

I get the whole "spoilt brat" thing and too much support may not be good.

But the argument that giving little or no support may build self-reliance and independence does not resonate with me. I hear quite a bit that the treat-them-mean, tough-love sort of stuff may build them into stronger adults.

I'm just a dumb money bloke, but personally I think that is rubbish. Tons of love, support and sensible financial help, if it is available, to support long-term goals such as education and housing are in my view the way to go .

One thing is for sure, if either Vicki or I make it to 90, we see little point in giving money to them when they are around 65. If you are in a position to do so, why not do it when it is most valuable to them?

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
M Koppert
August 25, 2021 9.24pm

I wholeheartedly agree Paul. As the recipient of such Tough Love parenting I often wished things were different. I attended university outside of Australia, in a country where parents' income determined whether the government would subsidise the child's tertiary education, or not. My parents felt it would spoil me if they were to provide financial assistance with my studies or rent, the government said I did not qualify because of my parents' income, so aving just finished Year 12 at 17 years of age I worked nights in a bakery to be able to earn enough to pay rent for my room in a student dorm and pay for food. I attended lectures during the day and somehow managed this for 6 months until I collapsed. By that stage I was so disillusioned with my parents that our relationship has never recovered. My friend's parents found out what was happening and lent me as much as I needed so I could sleep at night and work on weekends only. My Australian husband helped me pay them back. I have vowed that our children will receive every bit of financial support we can afford to help them along the's hard enough these days to save up for a home deposit, imagine adding a HeCS debt to that!

Thank you for providing such sensible advice to parents....

C Sudbury
August 26, 2021 9.24pm

I paid the first semester in full, but not the current one as so many people said HECS debt is cheap debt and you are better off investing the money. I was hoping the headline would answer which is the better way to go! You're getting sentimental in your old age, Paul! Lol

Rosemary Davis
August 27, 2021 7.23pm

I paid the first year of my sons course and i was planning on paying each year till he finished but after 18 months he deferred. Then 12 months later he started another course of which i paid for the year. He did well. He then started the next year (which i didnt pay) & deferred again - that became the first part of his hecs debt. Five years later he decided to go back to uni again & i let him put that on his hecs debt. I decided that if he finished his degree, i would pay it but if he deferred again, it was his to pay. At the age of 31 he finally finished his computer science degree after this time 4 yrs & had a full time job within 3 months. I then paid his hecs bill as a reward for getting his degree

Susan Toole
August 28, 2021 11.16am

We have three children. Our eldest is in his third year of a four year degree, which we have paid for and plan on finishing off paying, however it comes with the criteria that any subjects failed are then his responsibility to pay for. We will do the same with the other two. He also has been working since he was 14 and was a very good saver - so good that he bought a modest investment property last year which settled a week after his 19th birthday. It was our choice to bring them into this world, so we will help them as much as we can and hope that this will be the attitude they have with their children. All work and study hard, so I don't see this as spoiling them. You can't take it with you!!