With other household expenses on the increase, some parents find it difficult to pay for their kids’ education as the children grow older, IFE ADEDAPO writes on better ways to achieve this
A major aspect of the development of a country is adequate investment in human capital through education. For this reason, government has made provisions for free and compulsory education for six years in primary school and another three years of Junior Secondary School, as the right of every child. Despite this, some parents still find it difficult to finance the education of their children in the tertiary institutions.
Due to low allocation of resources by the government to tertiary institution, school fees are increased in tertiary institutions as witnessed recently in the Lagos State University. Children from poor and disadvantaged background feel the impact more and are prone to dropping out of school.
To guard against this, experts have said proper planning is important for parents to be able to give their children the bright future that they deserve.
Experts say the planning has to start now just the same way they plan for retirement, car and house purchase. They don’t need to wait till their children are enrolled in school because their children are the best and most profitable investment they can ever have.
According to them, planning earlier will give parents the fulfilment and the rest of mind they will need in future. Experts say quality education is important to break the intergenerational cycle of poverty and inequality plaguing the nation, as it will translate to increased income.
Therefore, to secure the future of these children, experts have pointed out how best they can plan for their child’s education. This they add should be done before parents become overwhelmed with school expenses.
Determine the number of children you want
A lawyer with Subomi Chambers, Mrs. Funmilayo Bambeke, explains that initially, it is best for a family to plan for the number of children it will have. Thereafter, an education trust fund should be organised for each child immediately after birth. She says many banks and other financial institutions offer a variety of education trust fund packages that can help in protecting their future.
Experts say the sooner parents start planning, the better and more convenient it is, to avoid disappointing your children at the point in their life when they need your support most.
Therefore, they advise that families should start with a small amount which will eventually accumulate into huge sums, keeping in mind that school fees increase as the child advances in education. The smart way is to start planning before the child is born, immediately after birth or when your child is still in pre-nursery, according to them.
Bambeke says a monthly plan is advisable for salary earners or weekly plan for business owners.
She says, “Especially when there are more than one child, you should make an estimate of the cost of their education altogether and start saving up. It does not matter what you are earning right now, just consult a financial advisor and identify a savings plan that is convenient for you.”
Calculate the cost
Experts say it is essential to calculate the cost implication of a child’s education, and then decide how much the parent is willing to contribute and how much the child will be responsible for. For example, some parents commit to paying for tuition, room and board, giving the child the responsibility for the rest of the expenses.
How parents save and invest for a child’s college education, experts say, depends on how old the child is at the moment, the family’s overall financial situation, the amount they have to invest and the level of investment risk you can afford.
They say once the plans are in place, parents should review it regularly to incorporate new information about college costs and tax-advantaged ways to save for college. They also advise that if they have more than one child, they should set up separate college funds to keep the investments appropriate for each one’s age.
Scholarship or grant opportunities
Experts say parents should take a keen interest in the academic performance of their child right from the beginning of their academic life. They should assist them to develop a high intelligence quotient. Exposure to brain tasking and thought-provoking exercises will help to improve their critical thinking skills.
Doing this, according to them, will increase their chances of securing a scholarship or grant to support the fund provided by their parents or guardians. In addition, a scholarship which creates opportunities for academic excellence and supports the pursuit of their career exist nationally and internationally hence, they advice guardians to speak to a high school counsellor about available scholarships and grants.
Identify a suitable education plan
The Regional Manager of Mutual Benefit Assurance Plc, Mr. Olabode Ajayi, explains the advantages of securing an appropriate plan that will be convenient for the parent and meet the educational need of the child.
He says a good plan should minimise tax burden, ensure access to quality education and guarantee the future of your child’s education whether the parents are alive or not.
He says, “The educational plan could be monthly, quarterly, bi-annually or annually, as long as it is convenient for the parent. The premium paid will depend on the ability of an individual to contribute; however, the higher the premium, the higher the benefits enjoyed.”
Ajayi says regardless of the choice of education savings plan, the plan holder should take the contribution as a compulsory responsibility and should make it regular. The duration of the policy is also decided by the plan holder; however, it is advisable to plan based on the number of years the child will be enrolled in school.
He also says that most savings and investment plans are flexible and can be reviewed with time to determine whether your savings are on track and if not, the premium can be increased to meet with set goals.
Plan for retirement
Experts have pointed out that it is better to start planning for retirement alongside planning for a child’s education because retirement money will compound as the years go by and will provide a comfortable financial support in old age. According to them, parents should not wait for their children’s earning in old age, but should be independent of their children.
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