Behold, children are a heritage from the Lord, the fruit of the womb a reward. – Psalm 127:3
In the allure of parents taking home their new “bundle of joy,” the consideration of funding a child’s tertiary education and the associated cost is furthest from their thoughts. There is no perfect time to begin planning for your child’s tertiary education; however, starting as early as possible is the best way to ensure you are prepared financially and avoid the common pitfalls. A targeted plan is the best way to ensure that you can finance your child’s education without sacrificing financial planning for your own future.
Some considerations for your children’s education plans:
*Engage a financial advisor to assist you in better projecting future costs and work alongside you to plan accordingly for your child’s education. Forecasting the costs associated with sending children to university/college by using current costs as a guide and factoring in inflationary increases. Costs should include tuition for the desired programmes of study (whether at a local or overseas institution), accommodation, food, transportation, books, and other miscellaneous fees.
*Parents who have all intentions of their children pursuing tertiary studies overseas should ensure that any education fund that is opened is indexed in the United States Dollar (US$) at best. This allows the parents to protect their funds from any depreciation of the Jamaican dollar (J$).
The best approach parents should take is aptly summed up in the Jamaican proverb, “one-one coco full basket.” Consistently putting aside small sums and being deliberate about same will see you over time amassing a modest sum. Based on your child’s eventual choice of study, it may not cover all, or it just may; whatever the situation, you would not be starting at zero.
It is also known that, due to unforeseen challenges, some parents are faced with the predicament of alternate funding for their children’s education. Parents who have less than five years to plan for their child’s education should explore the options available, including a combination of loans and investments and/or grants/scholarships and low- or no-interest payment plans that may be offered by the school. With less time in hand to plan, parents would also need to invest more to meet the target amount and should discuss a range of investment opportunities with their financial advisors.
In a lot of instances, student funding is met through loans. It is advised that a secured loan may be a better option. The use of higher-interest loans such as credit cards and unsecured loans to fund education is not encouraged, as without careful management and quick repayment, the debt could become unmanageable.
As parents, if we consider our children’s education a high priority, then getting a head start will, at minimum, allow us to secure our children’s future while balancing our own goals.