Saving for Your Children's Future

If you are parent, saving for your children's future is surely one of your top priorities. Raising children can be quite expensive and you want to give them the best that you can provide.

Aside from the day to day expenses, you will also have to prepare for major future expenses like university, a start-up fund if your child wants to engage in business in the future or part of the deposit for a home.

Saving for your children's future in a secure way requires discipline on your part and the use of high interest savings.

If your child is academically inclined, it is advisable that you give them a chance in university. A university education, though not a guarantee of future success, will arm your child with the necessary knowledge and degree for entry to the ever competitive labour market.

A university education would be a considerable expense on your part. It is estimated that the average tuition for an undergraduate course in Australia can cost up to $16,500 annually depending on the kind of course your child chooses to take.

Master's and doctoral degrees would cost even more. Aside from the tuition, there are other expenses to consider like board and lodging, transportation, recreation, clothing, books and other expenses. Starting early using high interest savings can put you in a good position in funding your children's university education.

Maybe your child has a flair for entrepreneurship. You could make it a little easier for him or her by saving for start-up capital. Sourcing funds, especially for small start-up business can be difficult. You can give your child a head-start in the business world by preparing early using high interest saving accounts to accumulate funds. Even online savings accounts yield interests.

Having a fund for your children's future can also allow them to purchase their own home earlier with a systematic savings plan. Having a systematic savings plan can let you take advantage of the power of compounded interest.

A 7% annual percentage rate is achievable with most high interest savings accounts. The secret is to have a regular savings of a fixed amount over a period of years.

Compounded interest becomes more powerful the longer you hold your money in a high interest savings account so starting as early as you can is crucial.

Here's a simple example called the 777 plan. Look for a bank that offers a high interest savings account, say 7%. Start with $700. Every fortnight, set aside $77 ($5.50/day) to your savings for your child. This can be done conveniently with online savings account features.

An investment of $77 or roughly the equivalent of a full tank of petrol every fortnight will give you a final amount of over $108,175.69 if you stick to your plan for 22 years! You will hardly notice the passage of time and before you know it, by investing just $5.50 a day, you will have accumulated a decent amount for your child.

Disclaimer:

No investment advice provided to you.
This web site is not designed for the purpose of providing personal financial or investment advice. Information provided does not take into account your particular investment objectives, financial situation or investment needs.

You should assess whether the information on this web site is appropriate to your particular investment objectives, financial situation and investment needs. You should do this before making an investment decision on the basis of the information on this web site. You can either make this assessment yourself or seek the assistance of any adviser.