Friday, November 11, 2011

Parents Guide to Financing Their Kid's University

A big worry for all responsible parents is how they should go about ensuring their children can attend university to complete their years of formal education. While university is not the only path to a successful career, if your child’s passion is one which requires a number of years of university study then you want to give them the best opportunity to compete in their career market. There is no doubt that parents want the best for their kids when they grow up, this is both natural and proper, but it should not be forgotten that part of the education process is to learn to fend for yourself and this can be extended to young people who want a higher education as much as anything else. In other words how much should your children contribute themselves to their own formal education?

In many cases parents have gone without over many years to make certain that their children get the best education possible. In a child’s formative years this is absolutely necessary as he or she is far too young to take on part time work and they therefore need the full financial support of caring parents. But surely there comes a time when this is no longer as true. As the children get older they must learn to shoulder some of the cost of their educational ambitions.

There are four main stakeholders in education, these being:

1. State.
2. Industry.
3. Parents.
4. Child.

The state benefits from having a more highly educated population. The higher educated the members of a community, the more they will be able to contribute to the community in knowledge and aspirations. All communities need doctors, nurses, teachers, judges, lawyers, corporate leaders and politicians to name just a few; just as much as they need builders, electricians, plumbers and others in the skilled trades. All children growing up in the community need to be encouraged to reach their true potential as this benefits the state in the future as much as it does the person growing up within the community. This is why much of the taxpayer’s money goes towards the building, maintenance, subsidising and running of schools, colleges and universities.

Industry needs skilled personnel for it to be able to function to its full capacity. It needs highly educated people to run its plants, carry out research and to invent new or improved products. In return it also contributes to the cost of research establishments and assists financial needs by paying taxes to finance schools, colleges and universities.

Parents bring the future doctors, lawyers, tradespeople and more into the world and ensure they get the best education possible as they grow so they can take their rightful place in the community in the future. For this, much of the taxes parents pay to the state go towards education. These taxes go towards paying the cost of sending their children to primary schools, high schools, college, technical colleges and universities. Sure, they also have to contribute other money, towards their offspring's education all these years, such as school fees right up to university fees, as well as books and other necessities, but as all parents know there are many costs associated with educating their children that often go unnoticed.

From the day your child enters kindergarten their formal education commences. Their education at that stage of their lives is just as important as that of their university years. The state, through your taxation, helps pay the cost from that day on. However, when the child reaches the stage where they can help contribute to their own education they should assist as much as possible and this stage is reached when they are of university age. A good way of helping them do this is to open a high interest savings account for them on the day they start kindergarten. This is an important milestone which can commemorate with the first financial contribution to your child’s future, and they can be made aware of this account throughout their entire years of learning. Small amounts can be contributed regularly, especially at birthdays and Christmas. As the child enters their teen years, and they are encouraged to take on part time work, where they can get it, they can then contribute more to their education account themselves. On reaching 18 years and they make the decision to go to university they will have a fund of their own from which they can draw and add to, as required. Most countries also have low interest loans available for university students these days and these loans don't have to be repaid until the student graduates and starts work in their new profession.


Such an approach will still give a parent the opportunity to contribute extra to the higher education of their children and at the same time encourage the child to do the same. It will instil a habit of helping to pay for what they are receiving. University education, is a desirable ambition for all stakeholders who contribute to the education of a young person to have; the parent, the state, industry and the student themselves. All contribute large amounts of money to this end in helping to spread the cost. Individual parents need not feel inadequate if they can't contribute as much as others, because they will have already contributed a considerable amount, through the taxation system that is designed to provide for their family’s future too.

Alban has written a large range of articles on finance. Amongst all topics, Alban specialises in

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