How To Save For Your Child's Education

From policies to investment options, here’s the lowdown on the best ways to ensure your kids reach their potential.

RAISING kids is expensive. But it’s possible to have a financially stable family life despite the huge costs involved, financial planner Jillian Howard says. It all comes down to planning and preparation.

In this extract from her book on family finances, she explains how parents can afford their child’s education.

IT’S easy for an individual to control his or her finances. You’re accountable only to yourself for your spending habits and you make your own decisions, whether right or wrong.

Once you find a partner, however, you might find that your financial opinions differ, making planning much more complicated. And once you add children into the mix and you’re faced with the expenses they generate, financial pressure increases even further.

But if you prepare for it, learn to adjust and follow a good plan you’ll be able to enjoy a financially stable family life.

Statistically, couples who don’t have children are financially better off than those who do have kids. This doesn’t have to be the case but proper financial planning must be done for a family to thrive.

Without a plan, parents tend to spend their entire combined salary surplus on the children’s needs to the detriment of other financial needs, such as wealth creation (which benefits everyone, including the children) and retirement funding.

Another trend is to minimise life cover in order to save in the short term, which puts the family at risk financially should anything unexpected happen.

One of the key factors of proper financial planning is to consciously maximise your salary surplus by keeping debt and lifestyle expenses low and to use this surplus to grow your wealth. This often flies out of the window when children come along, as the surplus is used for the children.