The importance of saving for your child’s education has never been this essential. Historically, education inflation runs at roughly 3% per year above the inflation figure. This means that the cost of education is expanding more rapidly than our salaries. So how can parents prepare for their kid’s future? Here’s some advice:
Tips and tricks on saving for your child’s education
Set a goal
Saving for your child’s education should be part of your monthly budget. You also need a fixed deadline that will encourage you to spend your money wisely. When you put money aside for your kid’s future every month, you’ll become adjusted to living on a tighter budget. The more disciplined you become in the matter, the easier it becomes.
Keep the rising cost of education in mind
The savings you set aside for your kid’s schooling should go up with inflation costs. It’s a great idea to increase the amount every year by a minimum of the Consumer Price Index rating plus 3%. This should cover rising school fees and related costs.
Don’t wait to start
It’s really never too early to start saving for your child’s education. If you can, start doing it from the day your kid arrives in this world. The less money you have to save on a monthly basis, the smaller the impact on your overall budget.
Protect your money with an education plan
When you save in an education plan, your money is secure until you need access to it. Sit down and make sure you understand how the various plans work. After comparing your options, go for the one that meets your personal needs. Will you need access to the funds annually to cover school-related costs? Do you need to save in a disciplined way over a longer period to contribute to your kid’s university costs? These questions will help you determine which education plan is best for your family.
Call on the help of a financial advisor
Financial advisors can do free, no obligation and confidential financial needs analysis. This can help you identify and prioritise your needs. After your needs are clear, your advisor can also recommend product solutions that fit your budget.