Have you got a dedicated University funds account? Are you regularly putting money away for your children’s education? I didn’t for Chloe, but I wish someone had told me to do so ten years ago. I won’t be making the same mistake for Dylan and Erin.
Student loans were a thing when I was at University, the maintenance grant was being phased out, but tuition fees were not a thing. As a result, I left with about 5K worth of debt. Today’s students have on average ten times that figure. However, I still want my children to experience university and gain a degree if that is what they want to do.
ARE YOU ALREADY PLANNING FOR YOUR CHILD’S UNIVERSITY FUTURE?
The tuition fees and living loan should be viewed as a graduate tax in many ways. Martin Lewis did an excellent job of explaining it recently and I am happy and understand how it is paid back. However, what I recently discovered is that for us as middle earners (husband is an assistant headteacher and I blog full time) we are expected to be able to contribute to Chloe’s living costs.
Chloe will get two loans, a tuition fee loan and maintenance loan. The maintenance loan is means tested and due to our family income, we will need to top up. Finding this extra money is going to be a challenge as I haven’t saved for it and we are talking about £250 a month we think. Her accommodation alone is going to cost £150 per week, for a small room with an ensuite. It really is basic but expensive.
I have four years where I can save for Dylan but will need to do this alongside subsidising Chloe! Then I have ten years to save for Erin. Of course, if they then decide not to go to university they can use this money for a car or home deposit. Or I could take myself off on an around the world adventure! For Erin, because I have more time, I am looking at a longer-term investment. This is why I say start early to everyone I talk to now!
The issue is then how to save this money. It needs to be in a place that will grow my investment but be relatively easy for me to manage and understand. As a first-time investor, I feel apprehensive and want to be able to have good communication with my provider and understand the process without too much technical jargon.
I have done my research and a Stocks and Shares ISA is going to be the best plan for me. There are many ISAs available and too much choice can put us off taking action. This is where I have previously stopped, despite knowing I want to take the next step.
Recently, I have been talking to UBS SmartWealth, an online investment service launched by the world’s biggest wealth manager* that helps people to achieve their plans, goals and dreams. Within just 15 minutes, you are guided through the onboarding process from the comfort of your smartphone and will be recommended the right product for your personal circumstances, depending on the amount you wish to invest and your attitude to risk.
Unlike some investment services, the fees and charges for UBS SmartWealth are clear and there are no hidden costs. There is no upfront cost, no transaction fees and no exit fees. Customers can check how much their individual fee might be on the website.
Now is the time to be opening your ISA to make the most of the financial year. Learn from our mistakes and make some clever decisions that will help fund your child’s higher education. Middle earners especially need to plan for this as the assumption is that us parents will have the ability to contribute. Yet for many of us, we just don’t have the money sitting around without some forward planning.
I am committed to putting money away now for the other two because we just don’t know how much more a University education is going to get. However, I still believe that a degree will open doors in the future. Plus, university turns children into adults and acts as that bridge to independence away from the family.
How are you planning to support your child in the future financially? Are you already saving and investing somewhere? Let me know in the comments.
Important Information – As with all investing, the price and value of your investments and income derived from them can go down as well as up. You might not get back the amount you originally invested.
* Scorpio Partnership, 2017
Disclosure: Collaborative post with UBS Smartwealth.
I sometimes wonder how parents have the money to pay for the accommodation of their children while at uni. The rent is a joke, so expensive. I finish uni this year and I am going to be left with so much debt – around £50k ?.
My two boys (27 months and 9 months) have a bank account already and all the Child Benefit goes to them. I’m planning to give it to them when they get married though ?
It’s scary to think how much the boys would need for university..but like you I want them to have the choice. Stock and shares isa is a great idea to save for then.
Lynn james recently posted…Why a visit to Costa Rica is on my bucket list.
Frihghtens the life out of me – paying for Uni!
Becky recently posted…Creating The Perfect Garden Ambience In Time For Summer Fun
Honestly this whole thing gives me anxiety, along with wills, general life savings and anything that goes in the “being an adult and being financially grown up” category! Really useful though – I know my time will come sooner than I’m ready for it to!
This is something I worry about eternally I don’t feel like we are doing enough there always seem to be so many other things to turn our financial attention to!
Neither of my two are in their teens yet but I think there’s a very good chance both will want to pursue a degree so it’s something my husband and I are already planning for – it’s not easy!
It’s a great idea, and you should do it with children. One of the most important lessons a parent can teach their child is how to manage money. This can provide a solid foundation that will lead to good decisions and rewards later in life. If you consider yourself a good parent, but could use some advice on teaching your child about money, keep reading. As soon as your child has developed the ability to grasp an object and place it in a container, you can start preaching about the virtues of saving.
Cheerio
Alice Clover recently posted…Black gums or dark gums around teeth : Gum discoloration
I have a very small son, he is still in primary school, but I am already preparing him for a future school, I do not want him to stop studying without even finishing the college that is very important to have a profession or pursue a successful career.
actually its really good to do.its similiar like rich dad poor dad written by Robert Kiyosaki and Sharon Lechter.
I really liked your posting about this, and I’ve seen a few more like it recently – the best part about yours is, it’s very informative and useful and full of good information without a bunch of usless rants and BS!
I’ll be sure to give this URL to some friends
Thanks Again
Frihghtens the life out of me – paying for Uni!
Thanks for sharing such an informative article