Higher education is still one of the best ways for a child to develop their skills and gain valuable qualifications to help them find a wonderful job. Most teens will want to go to college/university after graduating from high school, yet there’s a significant barrier in the way: tuition fees.
Tens of thousands of dollars for a student to attend university for three years. While student loans can help with this, ultimately, your child will be in debt for decades to come. That’s why all parents should consciously think of ways to save for their child’s education. Give them a leg up by providing some tuition funds and reducing the need for loans. The sooner you plan this, the more money you can save – and here’s a quick guide to setting things up:
Open a dedicated savings account
What’s the first step to saving for your child’s education? Set up a dedicated bank account that lets you save as much money as possible for this specific purpose. Options like an RESP are the best around because they’re designed to add more money to your savings through government funding. You also won’t be able to remove money from this type of account until your child is 18, which prevents them from accessing it too early – or you from dipping into it like an emergency fund!
Make regular contributions
Next, you need to make regular contributions to this savings account. Try to add as much money as you can without ruining your budget. Monthly contributions make the most sense – you could even consider a side hustle to make extra money online and deposit all of your earnings in the account.
Keep putting money into the dedicated savings account, but don’t forget about your other savings accounts! Your child’s education is important, yet you need to remain financially stable at the same time. Ensure you budget so you can set money aside in an emergency fund, have at least one other savings account for yourself, and then the account for your child.
Teach your child how to be financially savvy
The first two steps are pretty much all you need to do to save for your child’s education. The most integral part is ensuring your child makes the most out of their money when they turn eighteen. As a result, teach them about financial literacy so they learn how to be good with money.
Children who grow up learning about money and how to be frugal will become financially savvy adults. They’re less likely to splurge all of their savings on silly things and will use it for the good of their education. It gives you peace of mind knowing that all your hard work won’t be thrown away within their first semester of university!
To recap the points in this guide: set up a dedicated savings account for your child’s education and make use of any government grants. Save regularly to keep topping up the account and growing their wealth. Finally, tech your child about money from a very young age so they’re more responsible when they get it.
