It’s never too early to start to save ……
My eldest finished 4 years in college this month, I was a little relieved to be paying the last of his college fees, reaching another mile-stone in the career of being a parent… unless he surprises us and wants to do a masters (yikes!).
It took me back to when it all started, as a young mother I paid weekly visits to our local post office, saving a little bit every week, and looked forward to the day I would bid my little genius farewell to the exciting life of college!
Like everything, the years flew by, college came around very fast (as did the wish he would opt for a college closer to home!). I was lucky, my once tiny An Post deposit account, graduated to a bigger investment account with Zurich a few years later. I had the benefit of saving every month and when some months were a little more expensive like Christmas and holiday’s I had flexibility to skip payments. I knew I would need my savings within 12 years and, given the fact this was my child’s nest egg, I was comfortable taking a modest level of investment risk.
Counting the cost of college years can be startling, especially if you have more than one child attending college simultaneously. A recent survey from Zurich Life on the costs of education revealed annual costs for students living at home is €4,522 per annum or €18,088 over 4 years. For students living away from home it is estimated €8,467 per annum or €33,868 over 4 years. This is only a national average though. For students living away from home and studying in cities like Dublin & Cork, accommodation costs can be so much more. In my own personal experience, we saw student accommodation costs significantly increase in 4 years with no signs of it abating.
SUSI (Student Universal Support Ireland)
Some of you may be familiar with SUSI grants which provides 2 types of grants:
(1) Maintenance Grants covering the cost of day-to-day expenses and
(2) Fee Grants covering colleges fees.
Both are means tested and are dependent on last year’s household income, the number of dependent children and whether you live within 45 kilometers radius of your educational institution (adjacent rate) or not (non-adjacent rate). Students living outside 45km radius (non-adjacent rate) may qualify for a full maintenance grant of €3,025 per year where household income is less €39,875 and less than 4 dependent children. A special maintenance grant of €5,915 is available where household income is less €24,000 regardless of the number of dependent children.
Equivalent grants for students living within 45km radius – the full maintenance grant is €1,215 and special maintenance grant is €2,375 (subject to above income and dependent thresholds). Lower rate grants are also available and subject to means testing.
My top 5 tips to save for your child’s college fees
- START – regardless of how big or small you can save. It is better to have something instead of nothing.
- INVEST – consider investing instead of saving in a deposit account if your child has more than 5 years before starting college.
- BE REALISTIC – you don’t have to have saved the full amount before your child starts college, you may continue saving during the 4 years of college or may just need part of the costs covered.
- FLEXIBLE – you may change how much you are saving if your affordability changes.
- REVIEW – review your investment regularly to ensure your savings meet your expectations.
It is good financial advice to ensure you have an emergency fund before you start saving for the longer term.
If you want a definitive guide on how to save sensibly for your child’s college fees, please feel free to contact me, www.sureplan.ie
Elaine Wilson
Qualified Financial Advisor (QFA) & Qualified Accountant (ACCA)
Director, SurePlan FinancialSource: Zurich Life Cost of Education Survey 2020
Source: Social Impact Assessment Series (SUSI) from Department of Public Expenditure and Reform October 2020.
