Children are expensive. This is an obvious fact. From birthday parties to extra circular activities, reaching for your wallet becomes almost second nature and The bank of Mum and Dad becomes one of your most repeated phrases.
But sweet 16th’s aside, the importance of putting money away for your kids future is now more important than ever.
Whether you want to help get them on the property ladder, or set them up in business, the sooner you start saving, the better.
The majority of clients I speak to, knowing how expensive it can be, would like to put money away for their children’s future university costs. Below are 6 reasons why you should start saving for your children’s education fees, yesterday!
- The benefits package of most expatriates includes the cost of education for their children. However, employers will cap this benefit before university. Parents who have been used to free education for the last 18 years suddenly become liable for university costs, which is also the most expensive to pay for.
- The average cost of one year of university is around $30,000 (from a 2015 HSBC survey). Multiply this by a standard 4 year course and again multiply by the number of children that you have and you end up with a significant amount of money that needs to be saved.
- The cost of education increases by around 5% per year, which means that $30,000 in 18 years time becomes $72,198.
- The figures quoted above are for the ‘average’ university in UK/Europe/US/Australia. If you are intending to send your little ones to an Ivy League or Russell Group university these figures can quite easily be trebled or even quadrupled.
- If you are a citizen of the country that you intend to send your children to for education, don’t think you can avoid these costs. If you are an expatriate residing overseas your children will be classed as international students, meaning full international student fees are applied with no access to government grants or student loans.
- The sooner you decide to start saving, the better. Spreading these costs over a longer period decreases the amount that needs to be saved and increases the compound growth of your money.
If you would like to find out how much it would cost to send your children to university, or would like any more information on the topic above, you can contact me using the channels below.
- Twitter: @ckadvisor
- LinkedIn: Chris Keeling DipFa CeSRE