While it’s lovely to have our kids back in school, the associated costs can bring financial worries for parents. If your expenditure is higher than your income, you only have two options: earn more money or spend less of what you have. While earning more isn’t always possible, we have four tips that might help you save some cash.
It is really important that you now plan your finances and often. My recommendation is that you should sit down and for a couple of hours every month. Like a road map, you will need to know where you are going and anticipate problems along the way. So write down all the current expenditure for the children (transport costs, lunches, additional books, school trips, sports equipment, extracurricular hobbies, pocket money). You should also think about how you can save money in other areas – such as lunches and after-school activities.
Review every cost and consider if there’s a more affordable option, like carpooling. For lunch allowances, some parents give their child up to €10 daily. A packed lunch can be prepared for less than €3 each day which would save over €1,200 annually!
If you send your child to fee-paying schools, you’ll need a significant amount by the time they finish third-level education. Start by saving the Child Benefit (currently €140 per month per child) into a Regular Saver account. EBS, AIB, and BOI are offering 2% p.a. So, for a monthly saving of €140, you’d earn €18.20 interest over 12 months. Once a lump sum has accrued, consider investing elsewhere for a better return.
For more complex investments, always seek professional advice. Investing €250 a month from when your child is 5 until they turn 18, at 3% growth per year, will accrue approximately €42,000 – covering third-level education costs in Ireland.
Borrow
Some parents borrow money for their children’s educational expenses. Shop around for the best rates:
For credit unions, you need to be a member for at least a month and typically lodge 2.5% of the loan amount into a Credit Union share account to qualify. Avoid unauthorised moneylenders, who can charge exorbitant interest rates
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Riordan Financial Brokers Ltd trading as Riordan Financial (C30375) is regulated by the Central Bank of Ireland. When providing advice, Riordan Financial does not consider the adverse impacts of investment decisions on sustainability however this can be discussed on a case-by case basis with the individual client.
