As parents, you want the best for your children, so it is a great idea to start planning for the future now, by creating a savings plan to pay for your children’s future education.
According to government figures, by 2025 the average cost of a three-year degree course will have reached $50,000… and that is without living expenses! If your children intend to become high-flying business lawyers or doctors, then paying off a massive student loan should not be a problem. However, most children starting out on their career paths will face the daunting prospect of having to pay off huge student loans – and that is before they can even consider starting to save for a home.
Of course, you do not have to reach the government’s project target of $50,000 but by saving regularly from the birth of your children, you will be able to build up a considerable fund, so your children can concentrate on their studies later in life, rather than worry about their course fees.
Here are some ways to save:
Start early: Set up a bank account as soon as your children are born and set up a direct debit from your current account – however small the amount is – 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.
Cash not trash: From the moment a 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 children grow. Instead, encourage your family and friends to give token gifts and to put money into your children’s savings account.
Piggybank: Even though we live in an increasingly cashless society, we still all end up getting weighed down with the shrapnel of loose change. So, lighten the load and pop it in your children’s piggy banks instead.
Earn their keep: As your children get older, encourage them to start earning and save 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. Get them to save a fixed percentage of their income towards an education that will ensure they can continue to earn and support themselves into a comfortable retirement.
Louisa Sanghera is a Finance Broker for Residential Mortgages, Vehicle and Asset Finance, Commercial Lending and Budgeting and Cashflow Coaching with Zippy Financial.
She has more than 30 years in the Banking and Finance Industry, and since founding Zippy Financial, has become a multi award-nominated expert in the field featuring regularly in industry press and speaking at finance and investment seminars across the country.