In just over a month, I will be a dad! That is exciting and terrifying in equal measure. From what I can make out, talking to friends and family, no amount of planning and anticipation can really prepare you for the moment when a tiny human being, who is 100% dependent on you to meet their basic needs, enters your life. And while I cannot wait for the cuddles, smiles and unconditional love that I’ll no doubt feel, I am a little daunted by all the responsibility.
My partner and I have carefully considered the safety of our future newborn and armed ourselves with the mountain of kit we will need to protect him including a cot, monitors, car seat, thermometer etc. It’s amazing how one so tiny can need quite so much stuff. And like many gullible, inexperienced parents before us, we have probably bought a few superfluous items for good measure!
While all new parents naturally take every measure to physically protect their child, far too many neglect to think about protecting their family financially. The birth of a child is an important time to revisit financial planning goals as these are hugely impacted by a new addition to the family: life insurance requirements will go up, estate planning priorities will change and guardians need to be nominated.
And then there’s an education fee plan to think about. There are those who have scoffed at my intention to start a fund for my child’s future education as soon as he or she is born, saying that it is premature. They might not find it so funny in 18 years when they realise just how expensive it is to put a child through university.
If you’ve not thought about it recently, have a look at this table which gives an overview of current tuition fees and living costs in the UK, the US, Canada and Australia.
The totals are shocking enough but perhaps even more concerning for those of us just entering parenthood is the final column. In just five years, fees have risen much faster than inflation in all these examples and by almost 40% for a mid-range UK university (Warwick). Imagine if fees continue to raise at those rates. In 18 years, when I hope my child will be choosing where to study for a degree, a university education could well be out of reach for those families who have failed to plan ahead.
Starting an education fund while your child is young not only enables you to spread the cost of tertiary education over a much longer timeframe but also to benefit from compound interest. The more time your money has to grow, the healthier your pot will be when your grown-up baby is ready to leave the nest.
That’s why as a soon-to-be fellow parent, the best advice I can give you is to start an education savings plan as early as possible in your child’s life so that when they head off to college, they will be able to study and maximise their potential free of financial worries and graduate with the best possible start in life: a degree and no debt.
If all this is resonating with you, I’m going to offer you a further incentive. If you sign up for a regular savings plan with me before 8th April – my baby’s due date! – you could enjoy bonus savings* to help you secure a bright future for your child. To find out more, just e-mail me at bmulder@infinitysolutions.com.
*Terms & conditions apply: A monthly minimum savings amount of $500 / €500 / £500 and a minimum term of 15 years are required to be eligible for this offer.
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