Are you looking to prepare your child for a future of academic success? While not all children will choose college after they’re finished with school, there are over 2 million students in higher education programs in the United Kingdom alone. This means that it isn’t unlikely that your child will become one of them.
But how do you afford higher education? With the costs of colleges rising by the year and student loans setting students up for financial distress, it’s a good idea to start saving for college as soon as possible.
It’s a daunting idea, but we want to help give you some direction. Keep reading for a few tips on how you can start setting your child up for academic success by learning how to save for college ahead of time.
Start Early
This is the most crucial advice that we can give you when it comes to preparing your child for college. You need to start as early as possible.
Higher education is expensive. While it’s possible to put aside enough money as your child enters their teen years, it’s much more difficult, especially for families who are in lower income brackets.
This means that you should start while your child is still young, preferably in their infancy or toddler years if you’re able. Some parents choose to start before the child is born.
The longer you have to save, the more money you can accumulate with fewer adjustments to your day-to-day spending. This is even more important if you have multiple children who all plan on going to University.
The rest of our tips apply regardless of how early you choose to start saving, but they’ll be more helpful if you start with plenty of time to save.
Create a Budget
Every household, regardless of the intention to go to college, should have a budget to adhere to. This makes saving easier.
First, calculate the income of your household. If your children have jobs, only include their income if they contribute to household necessities.
Make a list of all of your bills and spending that can’t be avoided or changed. These include internet, taxes, utilities, and the costs associated with your home such as rent or mortgage. Take these out of your income.
After this, consider your grocery bill. How much do you spend every month, and where can you cut down? Also, consider other areas in which you may be able to cut back, whether they’re necessities or not.
How much do you spend on gym fees or leisure activities? What about shopping?
With all of these things, you’re going to break your list down into “needs” and “wants.” These categories will help you learn where you can cut back.
Everyone needs food and clothing, but how much do you spend that isn’t necessary? For example, how much food waste do you accumulate? How often do you buy excess snacks, or expensive brands of items when the basic brands are just as good? See what you can do to reduce your spending in this area.
Do I Have to Cut Out Everything?
You can still spend money on non-essentials. You should be careful and work them into your budget ahead of time.
You want to add a percentage of your earnings to emergency savings, saving for the future, and college savings. All of these are important.
After this, set aside money for fun and leisure activities so you’re still able to go on holiday and provide nice products and experiences for your family.
Put Aside a Portion of Every Paycheck
Speaking of setting aside money, putting aside a portion of your paycheck dedicated to college is a great idea. The earlier you start, the smaller the portion needs to be.
Make sure that it’s a reasonable amount based on your necessities. For some people, this may be as small as 1% to 5%, but this amount still makes a difference in the long run.
Choose the Right Savings Account
Savings accounts aren’t all equal. While you may be used to the savings account associated with your normal bank, consider alternatives.
When you’re choosing a savings account for a college fund, look at interest rates. You’re saving for a long time, and a higher interest rate means that you get more out of your account. Your money won’t be sitting, it will be accumulating.
Most savings account interest rates are available to view online. Don’t choose a savings account before seeing what the best bank can do for you.
Involve Your Child
Your child can help you save for their education once they’re old enough.
If you like, you can give an allowance for household chores when they’re young. Teach them the value of money by taking a small portion out of their chore money to save. If they save even a small amount every week, by the time they’re ready to go to school they’ll have a small, but not inconsequential, amount of money.
As they get older and get their first jobs, talk about putting aside part of their paycheck for college. They may be resistant, but if you’ve been successful in teaching them about money, they’ll understand how important this is.
Finally, encourage your child to strive for scholarships. There are plenty of scholarships available based on demographics and academic performance that your child can apply to in order to help offset the expense of a college education.
Saving for College Paves the Way for Success
Affording college is difficult for many families. This is why saving for college early is so critical. With the right steps, you can send your children to school so they can reach their full academic potential.
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