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Saving/investing for a future college fund - I have some questions

  • 21-12-2017 7:39pm
    #1
    OU812
    Registered Users, Registered Users 2 Posts: 6,088 ✭✭✭


    OK, three kids, Eldest is 13, other two are 7.

    at the end of 2020, we have a lump sum of approx €15,000 coming & then a further average of €200 a month for the next (currently) seven years.

    This is the state savings account managed by an post & was specifically opened to create a college fund.

    What's the best way of using this money to give the kids the best possible chance of getting a quality college education (I admit to being clueless about the cost of college), having never had the opportunity myself.

    My plan was to use the money as collateral for a loan to hopefully pay for their education. There's a guaranteed €200 a month that could be paid off the loan, but obviously, there's three to pay for (with two at once in 11 years time).

    Should we be investing the lump sum or just putting it into a fixed term deposit account? Should we possibly re-invest it back into the state savings to get a lump sum at the end & finance college through that?


Comments

  • #2
    topper_harley2
    Registered Users, Registered Users 2 Posts: 537 ✭✭✭topper_harley2


    If you are clueless then you need to do research. There is no point saving for something if you have no idea how much you need! Perhaps E15K + 200 per month in a savings account will be plenty and you dont need any loan.

    With savings and investments, you NEED a target/goal. Many people say "I want to save and get more interest than from a bank account, please advise me". Its almost impossible to advise that person if they dont have a goal. The goal determines how much risk (if any) you need to achieve said goal.

    This has been asked and answered many times e.g.
    https://www.boards.ie/vbulletin/showthread.php?t=2057820069
    https://www.boards.ie/vbulletin/showthread.php?t=2057761052

    IMO if one kid is 11, then you will need the money for college in about 6 years. This is too short of a timeframe for investing. Your investment could drop in value just before you need to use E3k for accommodation for example.


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