Saving for your child’s education can be just as beneficial as checking in on the Preakness stakes odds before placing your bets. While education costs continue to soar, it doesn’t look like there’ll be any slowing down anytime soon. So, by saving for your child’s education today, you can work well in providing them with the future they deserve.
Today’s economic condition doesn’t make the desire to save any easier, especially when it comes to education needs and this has placed a lot of pressure on the cost of living and household income. But, don’t you worry because there are ways for you to try to save money for your child’s education while still living in your present economic climate. For more on this, stay tuned.
Contributions As A Gift
When it comes to saving, every cent counts, and while there’s no sin in having loved ones shower your child with gifts in the form of money or other things, why not advise them to rather contribute to your child’s educational needs for the future? You can suggest this as an offer.
By making a habit of this while the child is still very young, the money you’re putting away can gradually accumulate and this will help in lessening future expenses like tertiary costs in the years to come. So, the sooner you begin, the more compound interest your savings will receive, and the more rewarding your long-term profits will be.
Having A Savings Account
Many parents and guardians tend to start their savings plan by keeping some money in a regular savings account, however, this may not be the most ideal way for you to save money in preparation for your child’s future.
Regular savings accounts aren’t as worthwhile as you may think because you want the option you’ll be using to save money to offer you the best interest possible. This is so that the payout is large enough to cover large expenses once your child is of the age you were saving for. So, with a standard savings account, you won’t receive an interest rate that will help you achieve this investment goal.
By doing a bit more digging, you can search to find a savings account option that will offer you investment tiered interest rates so that the more you invest, the higher the interest you receive will be. You can speak to a financial advisor about the best options available to you after sharing your investment goals with them.
Opting For A Tax-Free Savings Account
Tax-free savings accounts are always a smart option to look into. Here, you’ll be provided with an annual total amount that you’ll be able to deposit in the savings account over single or multiple deposits. As long as you don’t go over this total within a year, you won’t be taxed on the amount and you’ll continue to watch your savings grow at a relatively faster rate in comparison to a regular savings account.
Begin this as soon as possible and be sure to keep your total deposit within the annual threshold limit and set lifetime limit. You can easily open a tax-free account right after your child receives an ID number. So, as you keep on making these deposits into the tax-free savings account, this money will legally and technically be kept as your child’s money.
The moment the child is of legal age to have the money paid out to them, they can then decide what exactly they would like to spend this money on. As the child grows, we advise you to provide them with the necessary financial education they need to learn how to handle finances and make sound financial decisions. So, at this point, communication is key.
Invest In Medium And Long-Term Investments
To plan ahead of education inflation, opt to invest in solutions that will outperform consumer price indexes. There are many investment plans that you can look into that can do this for you, but remember to keep fees associated with such investments in mind.
According to financial experts, by starting to save for your child at an early age, your saving approach can be more aggressive and you’ll be able to ride out market fluctuations, in turn, making the investment far more rewarding.
This is Rohan, I’m a Digital marketing Expert, Full time Content Writer and founder of BoxerTechnology.com I can help people across the world through my articles. I am sharing the latest stories from companies like Apple, Samsung, Google, and Amazon.