Do you intend to send your child to the best school? By now, you should already have realised that it could be very costly to do so. But since your child deserves to get the best education there is, you must start saving for that endeavor. Thinking about your child’s education should start right immediately after his/her birth. That means you would have longer time to save for his/her education.
As a responsible parent, you should make sure part of your savings is allotted to your child’s education. It may not be as easy as it seems. These days, one has to be very strategic to be able to generate savings. It would be a real challenge on your part. Here are several strategies you could take to save for your child’s education in the future.
Set realistic goals
Before you start saving, you must first set a goal or a target. Be realistic in doing so. How much could you save within a year? How much should you save before your child needs the money for his/her education? It would be ideal if you would begin assessing your current financial situation.
By this time, you should start thinking if your savings would cover just the tuition or the entire cost of education. Would your spouse help you out in saving for your child’s education?
Have a projection of how much you could save
After setting a target, start figuring out how much you need to save each month so you are able to meet your goal. This is the harder part. Each month, you could determine just how much you could possibly spare.
If your current household budget is already tight, what measures should you do to save more? If you think you could not possibly spend less, you might submit to the idea of changing your savings goals. Or you could opt to make extra money by taking a part-time job or setting up a home-based business.
This is also the time when you need to reassess your savings. Would you be willing to trim down your retirement savings? Be stricter and more disciplined when spending money.
Choose a wise investment strategy
After you have started saving money for your child’s education, you need to immediately decide how you could invest that amount. Yes, investing it would be wiser as it would make sure the money would grow over time. Just be very careful when deciding how and where to invest it because you could not afford to lose it.
If your child is currently below 10 years old, you still have a long time to build up savings. You may invest the money in stocks or mutual funds, which take time to generate ideal growth. If the child is between 10 years old and 14 years old, you may invest in mutual funds and short-term bonds, which come with less risk. If your child is already more than 14 years old, focus on mutual funds or bonds with shorter maturity, at least by the time money would be required to pay for tuition.
Take note that your savings approach would have to depend on your present goals, the time you could save, and your confidence in investment tools. Always monitor how well you are doing in saving and in making that amount grow. You surely would not want all your efforts to be futile.