How to Save for Your Child’s Education
Children are a bundle of joy and blessing, deserving only the best things in life according to each parent. Gazing lovingly at your beautiful newborn, education and school fees may be the last thing on your mind.
Education is regarded as the most essential weapon used by man to control his environment and shape his destiny. Education is a necessity in today’s world and your children education might be one of your family’s biggest expenses. As Parents, a very sound education is the main heritage we can give to our children.
We want our children to have the best education possible, yet school and university expenses and fees are costly these days and are on steady rise.
This article will not go into the beauty of education and its importance but rather we will look at the many ways to ensure we can afford good quality education for our kids without drilling a dent in our pockets.
Many parents wonder how much to save for their child’s education. They also wonder how soon they should start. It is quite simple. Save Early, Earn More. Even small savings each year will translate into substantial savings later. The truth is you never really know how much you’re going to need but a simple fact is, the more you put aside for education, the more options you will have.
HOW MUCH WOULD YOU NEED
How much you will need will depend on the kind of schools and education you plan for your children. Whether public or private schools, university or vocational training, you need a target. For example, if you send two kids to a private primary school which costs an average of N300,000 a year for each child, by the time they both graduate you will have spent N2,400,000 on school fees. And that’s not counting extras such as school uniforms, trips and sporting clinics.
Having a savings target is a helpful motivator. Consider some schools beforehand, calculate their fees and pinpoint an end date for the saving plan.
The earlier you start saving for your children’s education, the better. Education costs are usually a long-term goal that can take more than 5 years to achieve. Use the savings goal calculator and work out how much you can save.
Savings Account: Open a savings account specifically for putting away a percentage of your income monthly. An account with interest that compounds monthly is one way to prepare for your children education.
Education Savings Plan: major banks and insurance companies in Nigeria offer this option as a service/product. When you set up an education savings plan, you may be purchasing insurance bonds or investing in a range of underlying assets, depending on the plan. This means in addition to the money you put into the plan, you should generate investment returns.
Investment: Apart from saving, financial experts say it is also wise to invest in property, stocks and the likes; especially for long term targets. Real estate investment is a safe option to consider when looking for an alternative to saving. The value of land and property is bound to appreciate over time. Another option is stock market. Investing in shares is a good way to save money for the future and enjoy the growth and dividends.
INVOLVE THE CHILDREN
Let your children know your savings plan. It’s important they understand the benefit of long-term saving. Including your children in the savings process can help them develop the love for saving and appreciate its importance. You could even open a savings account and teach them to deposit their pocket money.
Let young children see you recording deposits and expenses. Older children can help do the maths themselves. This will help them develop math skills, when preparing for the university or higher education, they will already know how to save and perhaps have saved enough to fund some part of their needs.