“Education is the most powerful weapon you can use to change the world.said Nelson Mandela. One of the concerns of parents is their children’s education, especially after finishing high school. However, the cost of a private college education can be a headache and a problem for family finances. How to save to pay for your children’s college career?

Long-term savings is the best tool for financingespecially for private higher education, which in Ecuador ranges from $2,000 to $8,000 per semester.

“Planning is the key to achieving any financial goaleven more in the educational field, since it is the only way to take the strong funds that they require without affecting the liquidity of the future, otherwise, as in many cases, children are forced to abandon their studies due to lack of resources”, explains the Commercial Deputy Manager of Andalusia, Esteban Correa.

To achieve a sustainable and effective savings plan over time, it is not necessary to allocate large amounts of money; can start from $20 per month and increase the value month after month, including additional income payouts to further strengthen the fund.

“It is recommended that parents start saving when their children are five years oldso that when they go to university they have the necessary savings to pay for their studies,” says Correa.

Personal finance: What is consumption and what is investment?

How to do it?

1. Start your future savings plan as soon as possible: Don’t wait until your children are grown.

2. Analyze your financial situation: It is important to assess how much money you have to finance your children’s education. A basic exercise in determining value is establishing a monthly budget detailing income and fixed costs.

3. Reduce costs: By knowing the fixed costs, it is possible to define which can be reduced in order to allocate more funds to the future savings plan.

4. Avoid borrowing for unnecessary expenses: If you have debts, it is preferable to limit yourself to paying them as soon as possible.

5. Research and choose a savings plan: Savings and credit unions can be an excellent alternative because they have lower interest rates than other banking entities. In addition, there are specialized education savings plans, such as Andalusia, which through its “Future Project” offers parents the option of paying for their children’s studies, the minimum savings time is 24 months with a minimum fee of $20.

How to effectively manage finances while going back to school?

Plans that exist in the market

Several cooperatives and banking institutions have these savings plans.

● Savings or investment account: It does not require a certain amount, nor is it tied to a certain time, the only condition is discipline.

● Long-term programmed savings account: This type of account allows you to accumulate a specific item monthly, over a specific period of time.

● Specialized savings fund: This is an alternative that serves to manage money and generate returns for invested values, something similar to a term deposit.