Money Saving Tactics for Your Child’s Education
Good education is one of the investment parents can make for the sake of their child secure future. However, very few parents have a good financial plan to ensure that their child get that education. The following money saving tactics will enable every parent who desires and wishes that their child achieve their career dreams through good education.
Setting SMART goals
In order to achieve the objective of saving money for a child education, it is important to ensure that the goal is Specific, Measurable, Achievable, Realistic and Time bound. For example, you can estimate how much text books, uniforms, travel costs and tuition will cost and start saving until the child complete their education.
Start saving early
Child education up to post- secondary level and other trainings are very expensive and the costs increases progressively. Therefore, saving early will truly benefit every parent and ease the burden of paying fees later in child’s life. Other benefits occur when compound interest is earned on the saved money.
Register an education saving plan
This is a special form of a savings account that parents open to save money for their child’s education. Education savings accumulate and no tax is charged until they enroll for post- secondary education. In order to open this savings plan, parents and kid named on the plan are supposed to have a social insurance number. After the enrollment of the child in an education program they start receiving education assistance payments. Parents can also withdraw their savings which is tax free if the child does not continue with education after high school.
Trusts
Parents can open an informal in trust account with a financial institution identifying the child they are saving for. The money is held in trust of the child until they reach 18 years of age. The parent decides how much money is to be deposited, when, how often and who to manage the account. In case revocable or irrevocable living trusts are made legal assistance is important. This saving plan does not charge any interest on the money.
Juvenile life insurance
This is a permanent life insurance specifically purchased for the child. Some of the accumulated money builds up the cash value and child can borrow or withdraw the cash value and use it to pay for post- secondary education. Low interest is charged if the child borrows the money and the money invested is tax sheltered.
Other investments with funds growth potential
Investment that pays interest: The parent can open a bank account and save the money and as a result earn interest though it grows very slowly.
Investment that pays dividends: Buying stocks would also earn them regular income but that would depend on the performance of the stock.
Investment that pays capital gains: This is a long term investment that includes buying bonds, stocks and mutual funds. The money grows very fast and very small tax rates are charged. However, no guarantees are involved and can easily get lost.
To save money in this costly market, you should learn the tactics of bargaining. Healthy bargaining helps in saving your personal finances starting from small things (like vegetables, fruits, clothes, etc) to big ones (like negotiation with agents, etc).
So, what are you waiting for? Start saving your money from today itself and stay happy in the future. We hope that the piece of information shared with you is useful to some extent to guide you and show the right path for saving your money.
These are some of the saving tactics that can enable the parents to save for their child’s education in order to enjoy a secure future. In case you need any financial assistance for your child education you can call child support agency using csa phone number.
Category: Education
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