Every responsible parent knows that raising a child is expensive. But in the beginning the expenditure is basic. You provide food, shelter, clothing and entertainment. You make sure that your child wants for nothing and has the opportunities for development, education and recreation that may be enhanced by the amount you are willing to spend. For these costs, you can be prepared. The issue that is getting ever murkier, however, is the cost of higher education. With tuition fees and living costs on the rise it is difficult to know how much to set aside should your child wish to go to college or university. Every parent wants to be able to offer their offspring the brightest possible future and the strongest start in life, but in recent times it feels as though our control over this is weakening and our input can only be minimal.
Yet there are still a range of ways in which we can help our children and prepare for their higher education. It is still worth setting up a savings account dedicated to meeting the costs involved in going to university. Keeping this account separate from your other savings is prudent in order to be sure of what you have saved and for what purpose. Shopping around for your savings account is also important. There are a range of accounts available, from the likes of Santander to online-only financial service providers. Seek out the most competitive interest rates and be sure to take advantage of your tax free savings allowance with an ISA in order to make your money work harder and go further.
The other important step to take is to make sure that your son or daughter understands the importance of managing their own finances. Many students come unstuck midway through the term when their maintenance loan runs out and they still have six weeks left. Encouraging them to set up their own savings accounts where they can put aside money from part time jobs or summertime employment will help to give them a clearer understanding of the value of money and the time it takes to accumulate. Incentives such as agreeing to match what they save may prove effective when promoting responsible money management.