A high-quality education is probably the best thing you can give your child at any age. However, education is very expensive, especially at the tertiary level. Just as much as you love your kids and want them to have the best life, start with education savings as early as now.
There are many innovative ways you can start saving for your child’s studies. Even more important, you can get really good deals on savings and investment plans for your children’s education.
Here in Australia, there are many options available you can choose from. Here are a few of the most effective ways to save up for your kid’s future.
- Investment Bonds
When you save for your child’s education, inflation, taxation, and rising school fee rates can eat into the lump sum and make it ineffective when needed. A good way out of this is to invest in your child’s education.
Investment bonds, also called insurance bonds, are a managed investment offered by large fund managers. They have a 10-year period, and the company pays out the required 30% tax over the bond’s lifetime.
You can also make additional contributions to these bonds. This money will also not be restricted to education costs only, making it a very attractive option.
- Education Savings Funds
Also called education bonds, these operate like investment bonds but are operated by groups such as the Australian Scholarship Group (ASG) or the Australian Unity. The advantage with these is that your money grows and that the 30% tax charged can be claimed back when funds are drawn for school costs.
However, these plans are quite inflexible, and nobody can tell for sure if their child will reach the tertiary level of education.
- Regular Savings Accounts
Unlike fixed-term savings like bonds, regular saving accounts give you more flexibility and instant access to the money as needed. You only save small amounts at a time and can rope in your kids to do it and contribute to their future. They can save in their own children’s savings accounts.
You can get them to do piggy banks, sell their old books and toys, and use other saving methods to scrape up extra cash. Cost savings such as packed lunches, second-hand books, functional apparel (as opposed to expensive designers) can all help to save more.
- Stocks and Shares If you are good at investments, you can invest in stocks and shares for your child. This plan has very high potential returns, but it also puts your money at risk. Given the changing rates of inflation and ever-rising costs of education, it may be one of the more viable options if you don’t earn a very high income.
- Use Your Home Loan
If you are also paying your mortgage and cannot afford to make separate payments for your child’s future, you can marry the two using a home loan. It works through an offset account or by making extra payments and later redrawing money for school costs.
You can always know how much your home is gaining in value, and it makes it much easier to manage the two large costs. However, you need to be disciplined with keeping up the extra repayments and not let yourself be tempted into using the money for other things.
Even when you have been saving diligently for your child’s education, circumstances do happen in which you need quick cash to settle educational expenses. Sometimes, other costs like a first car, living expenses, books, and others can go beyond what you expected.
When you need a personal loan to finance your child’s education here in Australia, Quicke can provide it. Apply now for simple, straightforward, short term loans to get you through rough patches.