Education funding: 4 ways to save smart

27 Sep 2016

Only 20% of parents know how much university costs today, how then can parents go about planning for their kids' education funding? Here are four ways.

This is according to a survey which also states that 80% weren’t able to accurately estimate tuition fees, and 37% didn’t know how much to budget for other expenses like books, housing and food.

So how do you save enough to get your kids through school? According to “Manulife Looking Forward”:

1. Do your homework 
It pays to do some research into how much post-secondary education will cost. And remember, tuition is just a fraction of the total cost. You’ll also need to factor in books, food, transportation (if they’ll be living at home) and living expenses (if they go away). Also, if your child is thinking about studying in another country, tuition for international students is usually significantly higher than it is for locals.

2. Make a plan 
Decide how much of your child’s education you plan to cover – and how much they will pay for themselves. Do you expect them to have a part-time job during school? Will they borrow money? Answering those questions will help you determine how much you’ll need to save.

3. Start saving now 
A lot of people start saving as soon as their child is born. The sooner you start, the more year’s you’ll be able to get the grant, and the more tax-sheltered compound interest you’ll earn.

4. Get the whole family involved 
Bob Chick, Investment Advisor and Associate Portfolio Manager, Manulife Securities Inc, said: “My clients feel better contributing to an investment in their grandchildrens’ futures than buying them more stuff they don’t need. They know an investment in education carries one of the highest returns imaginable.”

 

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