60,839 students sat their Leaving Certificate this year – and many congratulations to them and their parents!
Many of them go on to third level education and with it, face all the financial problems that need to be solved. The actual current cost of raising a child from birth to completion of their third level education is estimated to be just under €240,000.
Recent Bank of Ireland Begin research found that 80% of parents said they did not believe the current state child benefit of €140 per child was enough to help with their children’s education costs, although today’s Budget is set to address this. .
Additionally, 86% of parents surveyed for the study said any cuts to Child Benefit next October would put them in a “financially difficult” position when it comes to funding their children’s education.
Conversely, if you invest €140 of child benefit every month in a stock market managed fund from the first month your child is born – that’s continued for 17 years starting with the 18th birthday. – Fund yourself for year 18, assuming a 5% growth rate each year, you end up with c. €42,000 – the exact amount needed to fund your child’s full third level education.
Now, when I tell you that 95% of families use Child Benefit for the exact reason they were introduced (to help families financially with their weekly living costs), you can understand why many families are under great financial pressure when they have children. Actually reaches the third level.
In the UK, the average student loan is £44,000 (€51,163) but it is even higher in the United States where the average student agrees to repay their student loan over the first 10 years of their working life by paying 30. % of income every month. This is built in with their mortgage/rent payments.
Here in Ireland, we are far from that.
For those with a limited income, you can apply for a grant – SUSI (Student Universal Support Ireland). However, this is a complex grant process and I believe is beyond the eligibility of most families, especially those in the middle income bracket.
Click on the link to check the specifics and see if you qualify – https://susi.ie/eligibility-reckoner/.
One way to cut costs is to shop around and look for value. The difference between where you do your weekly shop can make a big difference, especially when your student card comes into play.
As for finances, I would always check your local credit union first when it comes to student loans – they usually have the best rates and are the most flexible. Among the two pillar banks, AIB offers c. 8.5% (€261.22 per month on €3,000 for 1 year – and an annual interest amount of €134.68) while Bank of Ireland offer c. 9.7% (€262.76 per month and €153.16 annual interest).
Credit cards are a minefield. Most students do not have the income to pay back so knowing the interest rate is important. Revolut leads the charge here, but beware of those charges. Late payments will be charged €7 – so don’t delay!
If you “max out” your card, you’ll have to repay it over a 12-month period – so a monthly repayment with a limit of €1,500, including €30 government stamp duty, would be €127.50 a month – even while you study hard.
Post Money’s new credit card is also worth checking out – they have the best deal for balance transfers: 0% for 12 months.
When it comes to current accounts, pillar banks lead the way. Although the stamp duty charge on debit and ATM cards is 12 per cent per transaction (up to €2.50 for ATM cards and €5 for ATM and debit cards), none of the providers, including those pillar banks, charge the fee. .
For comparisons see the Competition & Consumer Protection Commission website www.consumerhelp.ie/currentaccounts.
I would definitely suggest a student budget. You need to know what your total expenses are relative to the income/grant. If your expenses exceed that income you have two options – earn more or reduce expenses.
Click on John Lowe’s profile above or on his website for more information.
The views expressed herein are those of the author and do not represent or reflect the views of RTÉ.
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