*This article may have affiliate links, which means we may receive commissions if you choose to purchase through links we provide (at no extra cost to you). For more details, please read our privacy policy/affiliate disclosure. Thank you for supporting the work we put into this blog!

How to Save for Your Child Edu­ca­tion l sav­ing for child edu­ca­tion l sav­ing for edu­ca­tion l sav­ing mon­ey for kids l sav­ing for kids college

Your chil­dren mean every­thing to you. They are your moti­va­tion, your joy, and your hope, and there is noth­ing you would­n’t do for them.

For this rea­son, you under­stand full well the impor­tance of a good edu­ca­tion in ensur­ing they live a long, pros­per­ous, and ful­fill­ing life. You also know that a strong edu­ca­tion can cost money.

In this arti­cle, we offer some prac­ti­cal and proven tips to help you save your hard-earned mon­ey so that you can direct it to what mat­ters most, edu­cat­ing your chil­dren for a bet­ter future!

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

College or university

Most par­ents set aside mon­ey to send their chil­dren to col­lege or uni­ver­si­ty. In many coun­tries, this is expen­sive. The world is more com­pet­i­tive, as is the job mar­ket, and very few insti­tu­tions offer free education.

Of course, after pay­ing for tuition, stu­dents also need to cov­er their liv­ing expens­es, and this is why it is nec­es­sary to think about sav­ing years before your chil­dren fin­ish high school.

Parents may also Save for Other Educational Reasons

Many par­ents are uti­liz­ing the ser­vices of a pri­vate tutor as they have dis­cov­ered that indi­vid­ual or small-group instruc­tion can be enor­mous­ly help­ful to stu­dents. The most viable school­ing option for your child may be pri­vate school­ing, and this does not come cheap. Of course, there are many unan­tic­i­pat­ed costs asso­ci­at­ed with mod­ern edu­ca­tion, espe­cial­ly in the realm of technology.

Don’t for­get, too, that edu­ca­tion­al expe­ri­ences are also valu­able. Trav­el broad­ens the mind and can serve as an edu­ca­tion for young peo­ple. Trips you take with your chil­dren can be edu­ca­tion­al as well as enjoy­able. Through trav­el, your chil­dren may start to learn a new lan­guage and be moti­vat­ed to con­tin­ue that jour­ney at home. They may be exposed to his­tor­i­cal sites of inter­est and exam­ples of great archi­tec­ture or may even be treat­ed to one of Shakespeare’s plays at The Globe The­atre. Trav­el offers so much more than sou­venirs and self­ies, so hav­ing enough mon­ey set aside for a jour­ney is valu­able.

Hav­ing real­ized that high-qual­i­ty edu­ca­tion for your off­spring will involve some inevitable expense, how do you go about sav­ing the mon­ey?

Read on!

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

1- RESP

Cre­ate an RESP. An RESP is a Reg­is­tered Edu­ca­tion­al Sav­ings Plan. The RESP is an account set up specif­i­cal­ly for a child’s edu­ca­tion and relies on con­tri­bu­tions from par­ents every month. One rec­om­men­da­tion is to estab­lish the RESP as soon as pos­si­ble so that the month­ly con­tri­bu­tions can be small­er and more achievable.

This method is par­tic­u­lar­ly pop­u­lar for par­ents sav­ing mon­ey for a col­lege or uni­ver­si­ty edu­ca­tion, espe­cial­ly in places where ter­tiary edu­ca­tion is costly.

Remem­ber, an RESP can be fixed or flex­i­ble. It can demand a con­tri­bu­tion of the same val­ue every month, or it can con­tin­ue even if you are only able to put in a small­er amount some­times. Ask this ques­tion of the finan­cial insti­tu­tion when set­ting it up.

Var­i­ous web­sites con­tain an RESP cal­cu­la­tor, which can help you to esti­mate how much you will need to con­tribute each month to reach your long-term finan­cial target.

Automatic contributions

You can have funds deposit­ed auto­mat­i­cal­ly into the RESP. This can eas­i­ly be set up at the time of open­ing the account and oper­ates like a direct deb­it sys­tem that we use in so many aspects of our dai­ly lives. It helps you to make con­tri­bu­tions if you might oth­er­wise for­get, and guar­an­tees that the cor­rect amount of mon­ey is enter­ing the account each month.

2- Non-registered account

Anoth­er form of sav­ings account is a non-reg­is­tered account. This dif­fers in that it offers more flex­i­bil­i­ty than an RESP. You can with­draw funds at any time, which can be advan­ta­geous, but it can also pro­vide a temp­ta­tion to use the mon­ey for pur­pos­es oth­er than edu­ca­tion. Fur­ther­more, par­ents are taxed on all of the income and cap­i­tal gains.

3- TFSA

A Tax-Free Sav­ings Account allows sav­ings to grow tax-free, and an advan­tage of this option is that the mon­ey can be with­drawn, when need­ed, with­out hav­ing to pay taxes.

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

4- Establish a Trust

A trust is clas­si­fied as a legal agree­ment in which mon­ey is trans­ferred from one per­son to anoth­er accord­ing to spe­cif­ic terms. It is regard­ed as a sound method for con­trol­ling and pro­tect­ing funds because the mon­ey will be used for its intend­ed pur­pose — in this case, education.

This option offers peace of mind, but experts advise that it is vital to take time to prop­er­ly out­line the con­di­tions of the trust when it is first estab­lished. Read the fine print!

One poten­tial dis­ad­van­tage of the trust option is that the 18-year-old child can choose to spend the large sum of mon­ey on how they wish – will they spend it on education?

5- Payout corporate dividends

If you are incor­po­rat­ed, or your fam­i­ly busi­ness is incor­po­rat­ed, you could pay out accrued sav­ings as a cor­po­rate div­i­dend and direct this mon­ey to edu­ca­tion. To uti­lize this option, your child must own shares in the company.

One advan­tage of this method is that the child will pay the tax, and at the time the child receives the mon­ey, they are like­ly to have a low income and thus pay less tax.

6- Sell, sell, sell

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

Sell some of your unused per­son­al items. If you have clothes, toys, sports equip­ment, and oth­er house­hold items col­lect­ing dust, sell them for a lit­tle extra cash. You can use var­i­ous meth­ods, and if you’re not keen on a garage sale or yard sale. you can take advan­tage of the pletho­ra of online sales plat­forms that are nor­mal­ly free to use and allow you to sell items direct­ly to oth­er peo­ple in your neigh­bour­hood or region.

You might be pleas­ant­ly sur­prised by how much you can earn for an item, as many of them are still in good con­di­tion. It’s also a great way to de-clutter!

7- Reduce expenses

How much did you spend on the last birth­day par­ty for your child? $100, $200? Did you need to spend that much?

If you spent $200, could you have thrown a per­fect­ly enjoy­able par­ty for half the price, and sent the remain­ing $100 to the RESP?

Bet­ter still, could you orga­nize a won­der­ful par­ty for a frac­tion of the price? Many par­ents cre­ate fun par­ties for their chil­dren on a very tight bud­get with a bit of hard work and creativity.

Plus, if some­thing does go awry, and the par­ty does­n’t turn out exact­ly as planned, does it real­ly mat­ter? Often the mis­takes, blun­ders, and bizarre birth­day moments cre­ate the best sto­ries for many years to come.

Also, think of oth­er ways to reduce expens­es. Ask whether chil­dren need expen­sive toys, or whether they can enter­tain them­selves with a few sim­ple toys and their imagination.

Con­sid­er how much time the chil­dren are glued to their video games and oth­er screens, and how much that form of tech­nol­o­gy costs you.

8- DIY

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

A proven method for reduc­ing expens­es and hav­ing more mon­ey to devote to your child’s edu­ca­tion is to do things yourself.

Sit down with your receipts and finan­cial state­ments and ask whether you could have tried to do some of the leg work for the home improve­ments. If you can cook at home more rather than eat­ing out or order­ing deliv­ery and if you can save mon­ey by fix­ing or reusing items instead of dis­card­ing them and buy­ing some­thing new.

9- Get everyone on board

Get your fam­i­ly and friends involved in the process of sav­ing mon­ey as well. One exam­ple of how you can do this is to pri­or­i­tize expe­ri­ences over expense. The next time your child has a birth­day or anoth­er spe­cial cel­e­bra­tion, encour­age rel­a­tives and friends to give them expe­ri­ences rather than more expen­sive toys.

Have an aunt or uncle take them hik­ing or fish­ing, encour­age grand­ma and grand­pa to teach them how to cook, sew, or do cal­lig­ra­phy – or anoth­er spe­cial skill that they pos­sess. Lat­er in life, your chil­dren will remem­ber expe­ri­ences more than they remem­ber expen­sive items.

Take this prin­ci­ple fur­ther and invite friends and rel­a­tives to forego a toy and instead con­tribute some mon­ey direct­ly to the RESP.

How to Save for Your Child Education l saving for child education l saving for education l saving money for kids l saving for kids college

Last but not least

Fund­ing your child’s edu­ca­tion is chal­leng­ing but pos­si­ble. Exam­ine var­i­ous sav­ings accounts such as RESP or trust funds and deter­mine which suits your needs. Also, con­sid­er cut­ting down on reg­u­lar expens­es and encour­age friends and fam­i­ly to sup­port your efforts by con­tribut­ing direct­ly to your child’s future education.

Try DIY and use hard work and cre­ativ­i­ty to avoid over­spend­ing, and before you know it, you will have put away enough mon­ey to fund qual­i­ty edu­ca­tion for your beloved children.

 
error: Content is protected !!

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team. Furthermore, we will give a 15% discount on the next order from our shop after you sign up!

You have Successfully Subscribed!