As little as Joshua is now as he gets older I really need to start thinking about his future and so I am starting to think about his university education with some experts showing that the average cost of a year at Uni is starting to top 25 thousand pounds, its enough to have me panicked!
It seems that a wodge of £60,000 is what is needed to safely see your child through a BA degree and so in light of that bombshell I obviously want to start saving for Joshua’s future as soon as possible, and so I thought I would begin having a look at the savings options that are available to young families like us.
I’ve learned over the years that anything that makes you anxious is best handled by diving in headfirst – nothing seems to make the nerves go away better than being armed with knowledge! Here is a small list of some of the things I have learned on my recent research about saving for education.
Interest, interest, interest!
Seek out an account with the best interest rate possible and start whacking away as much money as you can comfortably afford each month. A one percent increase in interest from one bank to another can add up to HUGE savings over the years. From the Guardian:
“The better the interest rate or return you earn, the less you will need to put away per month. If you saved £170 per month over 18 years with an annual return of 5% on your savings, you would generate a pot of around £60,000 (before any costs or tax). The same monthly investment at an annual rate of return of 6% would result in a pot of £66,000 after 18 years.”
·But what if I can’t afford £170 per month?
This was my first thought after reading that Guardian article – but even if you can only put aside £25-50 a month it is better than nothing, and your interest will accrue over the years.
Understand your credit report
This is a biggie, but some people don’t even think to check their credit report before embarking upon a big savings plan. I am no expert on credit reports, but I do know that there can be unpaid debts and black marks sullying your credit that you do not even know about. If you begin to understand your credit report you will be armed and empowered with the financial prowess that you will need over the coming years of savvy savings and as I had written about previously … don’t panic your credit report may not be as scary as you thought!
Where should I place my money?
Experts state that if you are planning to save over the course of ten years or longer (like I am doing) you are wise to place your money in a stock based savings scheme. Again, from the wise old Guardian, “According to Moneynet.co.uk, the best-paying children’s savings accounts are offered by the Halifax (Children’s Regular Saver account, paying 6%) and Bath building society (Future Builder account, paying 5%).”
One of the other main things I have learned in my research is that it is a great idea to speak with a financial advisor as soon as possible! They will help to guide you towards the best options for your money – and ultimately the best options for your children.
Disclaimer: This is a collaborative post.