Saving for your Children’s Education: 6 Important Tips

child making stacks of coins

Few parents would disagree to the importance of quality education for their offspring. Unfortunately such education does not come cheap. Therefore, it is imperative that you plan before hand since it is arguably the best investment you can make for your children.

However, once you make up your mind that you will start saving for your kids’ future, you will realise that it’s not really that difficult to save up and does not involve any big financial sacrifices either for you or your spouse.

1.     Make saving Attractive for your Children

Since it’s their own future at stake it would be prudent to get the young ones involved in the saving process. This is because it is not all that difficult a concept to understand and once the child grasps it, then it just might be a life altering experience for him or her. You may consider giving your child a small allowance or stipend so as to make them understand that you don’t have unlimited resources and they are also responsible for their own future.  But while doing so also make sure that they spend at least a quarter of their allowance on their own basic necessities such as clothes and school books.

2.     Investment Bonds

Investment bonds may easily be acquired from any number of financial institutions and are now becoming a universally accepted option for funding the future educational needs of children and young adults in Canada.  These bonds are available in a variety of different investment options that may include both variable as well as fixed interest.

3.     Start as early as possible

When it comes to your children’s future, it is never too early to start.  If you plan ahead by saving as early as possible, you would be able to have a tidy nest egg by the time your kids grow up to be of college going age.

4.     Be Creative in your Saving

If you feel that the amount you are saving is not good enough to afford your children a quality education, even in the long run than figure out just what part of your expenses have to curtail so as to ensure that your savings are correspondingly higher. For instance, if you ‘order in’ four times a week, reduce it to twice a week and put the amount saved into your kid’s education ‘nest egg.’

5.     Don’t put all your eggs in one basket

If you want to save and invest for junior’s education, it would be advisable not to put all your savings in only one account. Rather you should try and hedge your bets by investing in different places such as investment bonds or stocks or even property.

6.     Set clear cut goals

Once you have determined how much you want to save and for how long, you may set your core goal accordingly and in this way budget your monthly expenses. Since this type of saving would be more in the nature of a day to day observation of expenses, it would help you stay on track while serving to keep you motivated in the long run as well.

 

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