No matter what stage of education your child is at, it’s a good idea to plan ahead for college fees as six in ten parents in Ireland expect to get into debt because of third level costs for their child.
We want to take some of the pressure off you while planning this next step in your child’s life, so we’ve broken down some of the costs and some tips to help you save for your children’s education.
Average costs of college in Ireland
College fees in Ireland can be as much as €3,000 per year, depending on which institution your child attends. The average annual cost to send an Irish student to third-level education if living in rented accommodation in Dublin is more than €12,000, and over €11,000 if they are living in other parts of the country.
Most third-level courses are three to four years long, meaning you could be left with a jaw-clenching €48,000 bill! It’s important to keep inflation in mind too, because these costs may rise by the time your child heads off to college.
If your child qualifies for a student grant, the maximum amount available is €3,000. This is a good helping hand, but still only a small portion of the full amount needed.
When calculating third-level costs, you should include things like rent, food and transport costs not just books and tuition fees.
Tips to help you save for your child’s college education:
1. Create a habit
The best starting point is to get into the habit of saving by creating a savings plan. Try to put away a portion of your child benefit payments if you can, and if this isn’t feasible, aim to save a realistic percentage of your household budget each month.
2. Understand your spending
To help understand what you’re spending your money on, keep an eye on your bank and credit card statements. This will give you a realistic idea of what’s affordable savings-wise.
3. Evaluate your options
Once you’ve completed these first two steps, you’ll need to look at the most appropriate savings and investment options for you. This will depend on how long you have to save before your child starts college.
4. Find the right place
When deciding where to open your savings account, you’ll need to decide how much access to your money is required. Certain savings accounts require a set notice period before withdrawals can be made.
5. Help your savings work for you
Regular monthly saving aims to allow you to gradually build up the funds necessary to support your child’s third level education. You can save from as little as €100 a month through Regular Saver.
You also have the option of a single premium Investment Bond which gives your built-up lump sum the potential to grow over the medium to long-term. You can invest from as little as €10,000 through an Investment Bond.
Below are examples of two families, one who are regular savers and one who are lump sum investors.
The regular savers
Let’s say Alice and John have decided to invest €140 a month into Aviva’s Regular Saver account to help pay for their child Annie’s education. If we assume their fund returns 3%, 5% or 7% per year, the following table shows what their return could potentially look like after 18 years excluding the impact of tax. Not a bad return for a €4.60 investment a day!
The lump sum investors
Let’s say they invest €10,000 for their child Alex’s education in an Investment Bond. If we assume their fund returns 3%, 5% or 7% per year, the following table shows what their return could potentially look like over different time periods excluding the impact of tax.
If you would like to discuss further, please call us on 025-30588 or book a complimentary chat here. We are always happy to help whether it is in our office, via zoom or over the phone. You can also click here to use our cost of education calculator.
Tracy Sumstad is a highly qualified and experienced Senior Financial Consultant with over 20 years of expertise in the Finance Sector. Tracy is well-equipped to provide comprehensive advice on financial planning and corporate solutions. Her focus lies in helping clients identify their unique values and goals, empowering them to make informed financial decisions that protect and enhance their wealth and success.