Education is one of the top priorities for parents, with saving for education one of the top four monthly expenditures among lower-income households. But how do you plan and save for school fees at a time when many families struggle to make ends meet every month?
It all starts with a budget, says Natasha Vellieux, Financial Manager at SPARK Schools. Think of your budget in ‘must haves’ and ‘nice to haves’. Must-haves include the best education for your children, saving for your retirement and unplanned events in your life. This will help you to identify exactly where you can cut costs in other areas to accommodate for the best education you can afford for your kids. Then follow these five tips:
IF POSSIBLE, PAY FEES IN ADVANCE
While not everyone can pay a child’s entire school fees in advance for the year, this is one of the best ways to save on school fees, as many schools offer a discount for early payment.
PUT ASIDE MONEY EVERY MONTH
This will help relieve the financial burden at the beginning of the new year when stresses are high and money is tight. It’s far easier to come up with regular, smaller amounts of money than one big lump sum all at once.
USE YOUR LOYALTY PROGRAMMES
Many banks and retailers offer reward points that you can put towards items like uniforms, stationery, and the numerous small expenses that come with a new school year.
CHOOSE THE RIGHT SAVINGS ACCOUNT
When saving for school fees, make sure you’re able to balance the best possible returns with accessibility. If you’re saving for the next year, choose a short-term savings account, which will allow you to withdraw the money when you need it. But if you’re taking a longer-term view, for high school or even university, rather look to long-term savings or investment plans.
UTILIZE YOUR RETIREMENT ANNUITIES TAX BENEFITS
Retirement annuities have tax benefits, investing in a retirement plan has both a tax advantage which puts more money in your pocket at the end of the month and gives you peace of mind when you retire.
‘The most important thing is to start saving as soon as you can for your children’s education. The more you can save, the more you’re helping your kids lay the foundation for a successful future,’ said Natasha.