5 Steps to Plan and Save for Your Child’s Education

March 23, 2021
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Education is taken very seriously in the Cayman Islands, and your child’s future depends on having a good strategy in place as well as the means to pay for it.

Best way to save for kids college

The most valuable gift you can give a child is a good education. It is the foundation of everything they achieve later in life. But if you don’t start planning early on how to pay for it, you could find it’s one of the most expensive commitments you will make and, worst case, possibly one you can’t afford.

We’ve all heard how British toffs put their son’s name down for Eton College the day he’s born or the wealthy New York parents fretting about getting their newborn into the right kindergarten. Planning a child’s education needs preparation, both in strategy and in financing.

Get Started Early A savings or investment plan, like a life insurance policy, works best over the long term. The earlier you start child education planning in the Cayman Islands, the better. Start saving as soon as a child is born, and your monthly premiums will be lower, interest earned through compounding will be higher and accumulate faster.

Keep Your Investments Separate Depleting other substantial funds, such as those set up for retirement or buying a home, in order to fund a child’s education is tempting but should be avoided. Ring-fencing of your investments and their purposes is the best way to save for kids college. Separating your investment interests is an important part of your overall investment strategy and works best with the assistance of a professional financial planner.

Cayman Islands investment advisors

Hire a Professional Advisor An expert financial planner will be able to guide you through the process to make the best decisions that suit your income, your education aspirations for your child, and your ability to save. They will recommend a diversified portfolio of investments that strike the right balance between safety, liquidity, and returns. You are fortunate here that Cayman Islands investment advisors are also extremely international-minded and are very familiar with plans that can be transferred worldwide, funded with a variety of currencies. This is good news when it comes to planning an overseas education or if your family moves away.

Future-Proof the Costs With the help of the right financial investment advisor and an early start to your child’s education plan that takes inflation into account, you will have enough capital accumulated by the time your child reaches college that you will have the ability to not only to afford whatever the fees will be 18 years from now but also assist with other expenses such as accommodation and travel home, as well as all those extra-curricular activities and holidays.

Plan for the Unexpected Life insurance is the best way to plan for unexpected changes in your circumstances that might affect your ability to keep saving for kids college. Your financial advisor will be able to recommend health and life insurance coverage that ensures your child’s education costs are covered in the event of your death or incapacitation.