As parents, we want the best for our kids, so it’s a great idea to start planning for the future now by creating a savings plan to pay for their education. Here are some simple, tried-and-tested ways to create a ‘future education’ nest egg!
According to government figures, by 2025 the average cost of a three-year degree course will have reached an eye-watering $50,000! And that’s without including any living expenses. Wow.
And, most kids starting out on their career paths will face the daunting prospect of having to pay off huge student loans at the beginning of any fledgling career – and that’s before they can even consider starting to save for a home.
Of course, you don’t have to reach the government’s project target of $50,000, but by saving regularly from the birth of your child, you will be able to build up a considerable fund, so your child can concentrate on their studies later in life, rather than worry about their course fees.
Top Ways to Save
Start Early: Set up a bank account as soon as your child is born that is connected to a direct debit from your current account – however small an amount – to ensure a steady drip-feed of funds. Make sure you 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, they are 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 small, token gifts and use the bulk of their generosity to put money into your child’s savings account, or use an app like Purposit to collect money that if gifted to them.
Piggy Bank: 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 child’s piggy bank instead at the end of each day. You won’t notice such small amount and it will build up quickly.
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’re old enough, get them out earning at a weekend job. Then, encourage 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.