How to finance your child’s education
As a parent, you may worry about how to ensure your child can receive a post-secondary education. Costs are constantly rising, and you may face high tuition fees as well as cost of living expenses if your child has to live away from home.
Here are some steps you can take to save for your child’s education.
Be clear about what you can and cannot afford to pay
Being clear about what you can afford to pay for your child’s education is critical. First, think about what kind of lifestyle you want for yourself when you retire. How much will you need to save for your retirement? The type of lifestyle you want will impact how much money will be available, so it’s important to be realistic.
If you feel it’s reasonable that you’ll cover a few years of tuition, but not the full cost, or you can help out with tuition and on-campus residence, be honest about that and let your child know they’ll be responsible for some costs, too.
Get your kids started on a bank account
Getting your children into the habit of saving early can help them out in the future. Open a savings account for them and put some money in as a gift or just to help them get started. They will see that they need to save money if they want to buy something big like a new computer or an electric guitar. If you talk about saving for things with your kids, it can also make them more responsible with their own money when they have it later on in life.
Use the bank account to track how close they are to paying for their education and celebrate when they achieve milestones, such as saving enough money for a course.
Look into grants, scholarships, and bursaries
There are many opportunities out there for your child to earn money that don’t have to be paid back. Governments, schools, private companies, and individuals often offer funding to students planning on attending post-secondary schooling. These can be awarded based on high grades, volunteer work, area of study, hobbies, or need.
Look into all the options available to your child and encourage them to apply for any financial help they’re eligible for.
Choose a school wisely and limit borrowing
You’ll want to choose a school wisely and limit borrowing. Before you investigate loans, think carefully about the school your child is considering. Encourage your child research schools and ask questions like:
- What’s the cost of attendance?
- What scholarships are available?
- Are there similar education programs nearby or will they have to move away?
- Can they do a couple of years at a less expensive school closer to home and then transfer schools?
- How much debt do students typically graduate with?
- Will they be able to repay their loans given their projected income based on what fields they tend to pursue?
- Are their alumni successful in their chosen field(s)?
These are just some of the variables to consider when deciding on a school.
While you may want to pay for everything your child will do in their post-secondary education, remember that every little bit helps. So even if you can’t afford to pay for their full tuition, being able to help out with part of the tuition will help set them up for success. It may also be more meaningful for them if they are required to contribute financially to their education. What’s important is that you factor in the cost of future education to your overall budget, and remember that you also have your retirement and other expenses to cover as well.