Most parents are willing to do whatever it takes to help their child succeed, and that includes going into debt to make it happen. While the cost of a post-secondary education is an expensive undertaking, it doesn’t have to break the bank. Additionally, even though your child’s future is essential, you don’t want to neglect your personal finance goals.
The bottom line is that you need to take care of your future as well.
Before you can start putting money away for your children’s university fund, it’s important you tend to your own financial priorities like paying off outstanding credit card debt or contributing to your retirement. It’s also a good idea to set aside 3 to 6 months of expenses to cover any unexpected costs that may arise.
Once you’ve established a solid plan for tackling personal debt you’ll be in a much better financial situation to help your child save for his or her future.
One of the very first steps parents should take when planning for their child’s education is to open a Registered Education Savings Plan (RESP). There are many RESP options to choose from, with plans offered through organizations like Children’s Education Funds, Inc (CEFI). Parents, relatives or friends can contribute to a child’s RESP and the money grows tax-free for as long as it stays inside the account. Companies like CEFI can help you choose the right RESP, advise you on making investments, administer your RESP and provide the money when your child is ready for post-secondary school.
Remember, whether your child is a toddler or a teenager, the best time to start a university savings is NOW!!
An established education plan is key, but parents don’t necessarily have to be the only source for university savings. By getting your child involved in the effort, it will help them initiate healthy money habits for the future.
There are other ways to pay for an education, like through grants or scholarships. Encourage your child to apply for them. It’s free money for school that you don’t have to worry about paying back. If your child excels in academics or athletics, there are plenty of scholarships they may be eligible for – even the small ones can add up fast.
In addition, teach your child how to save money instead of spending it. One of the best ways your student can help contribute to the cost of university is by working part-time while attending school. There are plenty of side jobs or work-study programs available to students. Just be sure your child understands that their paychecks should be applied to school expenses, not for extra-curricular activities.
Planning ahead really works. The best advice a parent can take is to do everything early and make saving for their child’s education a priority to ensure the university years are as debt free as possible.
