What’s the Best Way to Save for Your Kid’s Education?

Jun 12, 2019 by

College debt. It’s a common struggle for a huge part of the population and something that takes on many different shapes and sizes. News outlets often report on the difficulty that the young workforce experiences as a result of stifling college loans. There is even a trend among the truly desperate to leave the country and try their best to forget about their debt forever.

Paying for an education is a serious responsibility for a young person to undertake. As parents, we want our children to succeed in what they set out to do. That’s why saving for a child’s future education has become such an essential practice among parents. You have the ability to give your child a leg up in life when you don’t forfeit your child’s future education and prioritize educational savings.

Where to Start

You’ve probably heard all sorts of different ideas about the best way to save for college. You’re probably also aware of how large of a commitment it is to establish a dedicate college fund, and you’re probably not sure how to fit it into your other financial goals like saving for retirement or paying off the mortgage.

The very first thing that you need to do, however, is to address your own financial responsibilities. You need to be in a comfortable place with your money, which means taking care of your own personal debt. If you’re facing constant collection calls or if your unsecured credit history means your wages are being garnished, or even If it feels like you paycheques disappearing too quickly, a consultation with a credit professional is a necessary step towards an educational savings plan.

First: Address Your Own Debt

If you have an amount of debt that you know your income cannot support, then you’re facing insolvency and should address that first. Sometimes a sudden change in our income, employment, health, or personal life can have lasting effects on our financial stability.

If you have bills that you know you simply cannot pay, a Licensed Insolvency Trustee (formerly known as a bankruptcy trustee) can show you what steps you can take to reduce, repay, and recover from your debt. Legitimate debt relief actually reduces the amount of debt you owe, which is why filing a consumer proposal of even declaring bankruptcy can be the best way to hit “reset” on your finances and start planning ahead for a college savings plan.

Rules of Thumb: Are There Any?

One school of thought states that the best way to measure how well saving for college is going is by multiplying your child’s age by $2,000. For instance, if your child is three years old, then you should have $6,000 saved for their future schooling. The truth of the matter, however, is that there are no real or specific guidelines laid out for parents to follow to save for college.

As one financial advisor put it: “The number one factor in reaching your college savings goal is that you are contributing to an account consistently.” Financial professionals like the aforementioned bankruptcy trustees as well as credit counsellors are a very valuable resource when you are looking to set major financial goals.

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.