How early should you start saving for your child’s education?

With rising inflation affecting everything including the cost of education, planning for the future by starting to save for your child’s education has become important.

You may be single or a parent-to-be or you just had a baby, starting early to think and plan towards the children’s education is a great idea. Although, it might seem totally irrational to put money down for expenses that are not immediately on the ground, especially given that currently, disposable income is shrinking in the face of harsh economic conditions.

It is also not very easy to determine exactly how much you need to put aside for education inasmuch as tuition costs specifically for private schools keep climbing. In fact, a report notes that the cost of college doubles every nine years which means it will never come down.

Some experts suggest you start saving from the day your child is born. According to You and Your Family, starting before the child is born is actually better.

Before you start, it is important to have a modest expectation. The cost will depend on which particular school you or your child decides to attend. Your child should enroll in a good school not necessarily the most expensive school in the neighbourhood unless your income is expansive enough to accommodate the palatial cost. One thing to bear in mind, the more expensive the school is does not mean the better the education. Quality education goes beyond the teachings your child is going to get from the four walls of a school.

One of the benefits of saving for education early is that it imbues a habit of prudence in family expenditure. There is a futuristic view of family responsibility that gives you a good perspective on what to prioritize in your personal income.

Saving for education during time of pregnancy, it should be said, may pose a great challenge because most people tend to go broke during this period from buying cribs, baby clothes, baby foods and feeding the pregnant mother, designing the baby room and so on. A prudent management even at this time can leave you with something to put aside for school.    

It is by far the best option to save for your child’s education than to borrow. You must not save up 100 percent of the costs because like earlier mentioned; it is not possible to know how much you will likely spend all through their education. However, should you decide not to save early enough, there is the risk of borrowing to make-up when the time comes for the child to eventually go to school. Borrowing is one thing, paying back is another; not only are you likely to struggle to pay back, paying back may come with interest. 

There may not be prepaid education plans from schools in Nigeria at the moment, but some banks offer attractive packages for parents who want to save for their children’s education.

According to Nimi Akinkugbe, personal finance expert and CEO, Bestman Games, “The amount of money you can set aside is a function of how much you can afford. Consider the assets you hold, your debt situation and what you can realistically save given all your other commitments. Your neighbour may be able to deposit N50, 000 a month into Junior’s education fund; this may not be possible for you. Don’t be tempted to try copy others. Look at your family’s unique financial circumstances and determine what makes sense for you, what you can afford and can stay committed to, for the long term.”

She also advises that you start picturing the kind of school you would want to enrol your child. A clear picture enables you project better.

However, do remember that inflation is not the only thing that affects tuition. Other factors may include the region and the state where your family is residing, the neighbourhood and the ambition of the proprietors. Tuition for public schools is predictable at least over a period, as they require government intervention to change. Private schools however can adjust tuition cost at a whim.