Saving for Your Child’s Education
As parents, you want the best for your children – and, with the growing reluctance of grown children to fly the nest, you might want to start planning to avoid the prospect of having your 35-year-old offspring cramping your retirement by still living at home. The time to start planning is now, by creating a savings plan to pay for your child’s future education.
According to government figures, by 2025 the average cost of a three-year degree course will have reached an eye-watering $50,000 – before you even consider living expenses.
That means that most children starting out on their career paths will face the daunting prospect of having to pay off huge student loans before they can even think about starting to save for a home of their own. Putting saving strategies in place now to cover – or part cover their tertiary education will mean that once they start to earn, they can put their hard-earned cash towards the deposit of a property. Learning to save as opposed to earning to pay a debt is a much more uplifting experience and will get them off to a much more positive start in their career – and get them out of the family home sooner.
Here is a little inspiration on the ways you can save…
Start Early: set up a bank account as soon as your child is born and set up a direct debit from your current account – however small an amount – to ensure a steady drip-feed of funds. Shop around for an account offering the best interest, and once a nest egg grows make use of long-term deposit accounts for higher interest rates. If you didn’t do this and your children are older, don’t be disheartened, start now. It is never too late to start saving!
Cash Not Trash: from the moment your child is born, it is showered with teddies, toys and other gifts from well-meaning friends and relatives. Most of these gifts end up in the trash or are given away as your child grows. Instead, encourage your family to give token gifts and to put money into your child’s savings account.
Piggy Bank: even though we live in an increasingly cashless society, we still all end up getting weighted down with loose change. You may not have a piggy bank, but find a sturdy receptacle and encourage the whole family to throw in their loose change. Cash it in at the bank every so often (you’ll actually be amazed how much you amass in a short time) and put it straight into the savings account.
Earn Their Keep: as your children get older, encourage them to start earning and saving their own money. Start by paying them pocket money to do small jobs around the home and then, once they are old enough, get them out earning at a weekend job. Teach them to save a fixed proportion of their income towards their education. Aside from contributing to the education fund, this practice will set them up for life with a savings ethic that will ensure that they continue to support themselves into a comfortable retirement of their work.
Incentivise Saving: agree to match their savings dollar for dollar and see how quickly the funds mount up.
Help Them Get Entrepreneurial: set up an eBay account with your children and help them to sell some of their unwanted items online, then deposit the revenue straight into their bank account.
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