When it comes to education expenses, the key is to be prepared. All too often, parents find themselves facing huge amounts of debt when it comes time to pay for their children’s schooling. Here are 4 of the best ways to avoid sliding into debt from your kids’ education expenses.
One of the best tips you can take when considering your child’s education expenses it to start saving as soon as possible. Parents are increasingly beginning to plan for schooling even before the birth of their first child. By taking the chance to start saving as early as you can, you minimise the risk that your child’s educational expenses will leave you facing a huge amount of debt.
Evaluate Your Financial Standing
Knowing where you stand with your finances is an essential step in ensuring your ability to pay for your child’s schooling. Strengthening your financial position will allow you to provide the very best educational opportunities for your kids, so it should be of the highest priority. One of the first things you should do is work towards eliminating any existing debts that you may have. A great solution for multiple debts is to organise a consolidation loan.
This will enable you to combine all of your unsecured debt into one loan, with a single monthly repayment and a low rate of interest. There are many agencies which can arrange consider consolidation loans Australia wide, and help you to get out of debt and get ready to save for your child’s educational expenses.
Draw Up a Budget
Setting aside time to create a comprehensive budget will allow you to keep track of where your money is going. By itemising your income and expenditure, you will be able to have a greater understanding of just how much you have left over for schooling expenses.
Explore Your Options
There are a few options you can choose from when deciding on how to save for your kids’ education. Educational Savings Plans allow you to invest your savings purely for educational use. The terms and conditions can be quite strict with these plans, with severe penalties for early withdrawals and cancellations. This is an option which is best for families who aren’t likely to need to re-draw on their funds for any reason until their child is ready to start school or University.
Another option is to focus on increasing your mortgage repayments to allow you to re-draw when you need the funds for educational expenses. Some people prefer this to the official Educational Savings Plans as it gives you far more flexibility to use the money in case of emergencies or changes in financial circumstances. Alternatively, you can just make regular deposits into a dedicated savings account solely for the purpose of education.
While it is well known that education is one of the greatest expenses when raising a child, it doesn’t have to mean getting yourself into ridiculous amounts of debt. These 4 top tips will ensure that you have the best possible chance of paying for your children’s education expenses without breaking the bank. Start preparing now to give your children the best possible start to their lifelong learning experience.
Written by Emma Jane