Plan ahead financially for your child’s education

September marks the start of a new school year, where many Barbadian youth will be embarking on the next stage of their life and educational journey, by enrolling into primary, secondary or tertiary level institutions for the very first time.

It is at this time when their parents and guardians are met with the costs associated with these various levels of schooling, which is why Nicholas Neckles, portfolio manager with Sagicor Asset Management Inc. (SAMI), is encouraging every guardian to put measures in place from as early as possible to save in anticipation of their child or children’s educational journey, especially considering the costs of tertiary level programmes.

He made the point that it is much easier to save over a period of years, as opposed to trying to find the finances when their child reaches the age of schooling.

“If we take the example of a parent of a new-born, it would be much more manageable for them to set aside funds over an 18-year period, instead of depleting their savings or taking out a loan when the time comes to pay tuition fees,” argued Neckles. “Using this example, an individual who invests in our mutual fund products with the minimum initial BDS$500 and subsequently continues to add to the investment the minimum BDS$100 per month for 18 years, would accumulate a total of BBD $40,203.70 based on an annual average return of 6 per cent.”

To understand how beneficial this level of capital accumulation would be, one simply has to look at the cost of tertiary level education here in Barbados, across the region and certainly further afield in places like the United States, Canada and Europe.

“This cost puts considerable strain on households and their financial capacity to continue financing their children’s attendance at these institutions, without the assistance of loans, scholarships or grants. If the cost to enrol locally is seen to be prohibitive for some, then one can immediately see the difficulty of looking overseas where costs are significantly higher,” Neckles said.

Parents and guardians are therefore advised to explore the various financial options available to them to save for this critical period of their children’s lives, with Neckles encouraging them to speak to a financial advisor or contact Sagicor Asset Management Inc. for more information and guidance. (PR)