Planning Ahead to Finance Your Child's Education
If your children are still babies or toddlers, paying for their education may feel like long way off. However, the costs of education are rising and the earlier you start making financial provision for your children’s educational future, the more choices you and they will have later.
Even if your children are older it’s never too late to take steps to make sure your child’s future education costs are covered.
Financial experts suggest that after buying a house, your children’s education will be the largest expense you’ll ever face. So, it really does pay to think things through as early and clearly as you possibly can.
The Costs
Before you can start to plan your child’s education, you need to have a good idea of the types of costs you’re looking at. The important thing is not to underestimate what things will cost, as a shortfall in funding later on could leave you with a problem.Educating your child privately is obviously a large financial commitment and one which requires the most financial planning and advice. The total cost of a full private school education, followed by university could cost up to £300,000 and a boarding school will cost even more. The exact costs vary between private schools so it is a good idea to do some research regarding prices in your area if this is an option you’re interested in. It’s also worth factoring in how much prices have risen year on year historically to help you make financial projections.
Even if you don’t want to send your child to a private school, there are still costs associated with state schooling. You may prefer to prepare for these costs now rather than later, thus avoiding a large chunk of your income being swallowed up when the time comes. Expenses will include uniforms, field trips, excursions and possibly holiday childcare.
Higher education costs are now greater than ever. Financial packages are in place to help students finance their university life. However, many parents worry about their children getting into debt at a young age and prefer to save in advance to pay for tuition fees and living expenses. Currently universities can charge full-time students up to £3,145 a year in tuition fees. The government is also considering uncapping this fee after 2009. On top of this there are accommodation and maintenance costs to account for.
Researching Savings Options
Once you have an idea of the type of educational future you’d like for your child you can start researching the best savings strategy for you and your family.There are a wide range of options and the one you choose will depend on factors such as your income, your time scale and the amount you wish to save.
Options include:
- A Child Trust Fund
- ISAs
- Bonds
- Savings accounts
- Equity-based savings
- Stocks and shares
It is well worth spending some time researching all your options at this stage. A financial advisor will also be able to give you professional advice and insight.
Once you have a well-informed financial plan in place you will be able to budget accordingly and have peace of mind regarding your child’s educational future.
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