As a parent, it’s only natural that you’d want your child to have the best education possible so that they can have a great start in life and reach their potential. For a great many parents, that means setting money aside to be able to support their son or daughter – with HSBC finding that 91 per cent of parents plan to provide financial support when it comes to the fees and costs associated with further education.
The sums involved in paying for your child’s education aren’t insignificant so it pays, literally, to have a plan in place to be able to do your parental duty in this regard.
Here are some things to bear in mind…
Appreciate the cost
It’s easy to focus solely on university when thinking about the cost of education, since this has tended to dominate the headlines in recent years. However, you need to try to work out the cost of each stage of your child’s education if you want to be able to plan properly. Research commissioned by John Lewis found that parents spend almost £3,000 during their child’s reception year alone. The first year of secondary school – with all of the new uniform, books and equipment involved – is the most expensive for a parent, costing almost £7,000. Until you take time to appreciate the cost of your child’s education you’ll struggle to have an effective plan to pay for it.
Long term investments
When you know the cost, you can factor this in to your overall long term financial plan. Whether you are locking cash away into a savings account or looking to make your money go further through share dealing platforms, you need to consider when you want this investment to mature and when and how you want to access your cash. Many parents and grandparents start this process before their child is even born, giving them extra time to build up a decent buffer.
Not just a degree
Don’t just assume that your child will go to university. A degree isn’t for everyone and not all young people thrive in university life. Instead of support with university, you might well want to help your child through a more vocational course or to pursue some other career path. Just because you’ve saved money for this eventuality, you shouldn’t place undue pressure on your son and daughter to sign up for a course.
Encourage independence
While it’s only natural to support your child as much as possible, it is important to let them find their own feet too. At some point they need to be able to fend for themselves so encourage your children to contribute to the cost of their education as they get older. A part time job can help them to come out of their shell and boost their people skills as well as help to cover the cost of textbooks and living costs. Encourage them to save money themselves so they can see the value of getting into good habits at an early age. If anything, this is an important part of their own education too.
Understand the way student loans work
The size of student debt has caused much consternation and it’s clear that many parents are worried about just how much money their children will owe by the time they don their mortarboard and graduate. Yet, as Martin Lewis notes, you shouldn’t see the student loan in the same light as other forms of debt. It doesn’t show on a credit report and is wiped after 30 years, with only those on high salaries ever getting around to repaying the full amount. That doesn’t mean you and your child don’t need to think carefully about student finance of course, but it does mean that you shouldn’t worry too much about them being saddled with a massive debt.
See my disclaimer.
