We all aspire to help our children acquire the best education possible but unfortunately, educational expenses do not end when the Leaving Certificate results come out. After the significant financial outlay that comes with putting children through primary and secondary school, parents face the added cost of third level education.
The Central Statistics Office reported recently that in the last year the cost of education increased by a huge 9.4%. Expenses such as uniforms, books, school tours and outings weigh heavily on parents who have not planned for such well in advance. There is already in place a mandatory third level student contribution charge of up to €2,250 per year and that’s before the anticipated reintroduction of university fees. On top of that, the cost for a student living away from home is now at €7,803 per year* (*DIT Cost of Living Guide 2012/ 13).
With these expenses mounting up it comes as no surprise that the cost of educating children is right up there as one of the largest expenses many families will face along with buying a house.
Many people spend years focusing on the area they want to live in, the house they want to buy and the deposit required to secure it. Yet when it comes to their children’s education, which is also a substantial expense and of great importance, there seems to be little or no preparation. Parents’ education savings preparation should resemble the planning and saving involved buying a home. Ideally we should be putting away what we can afford now so as to secure the widest range of educational choices for our children.
Parents are much more likely to be focused on today’s bills and expenses but this lack of preparation could result in financial stress in the future. A saving of €100 per month will yield a lump sum of €30,000 in 18 years’ time assuming a net growth rate of 5% per annum. This will go a long way towards putting a child through university without the financially induced anxiety that sets in every September.