Ifac encourages Offaly farming parents to face up to cost of third level education

Current estimated financial burden at €40k per student

Ifac, the farming, food and agribusiness professional services firm, is urging farming parents in Offaly to take steps now to save for their children’s third level education costs.

The estimated cost per year is around €10k per student. This is made up of a mandatory student contribution of €3,000, an estimated €4,000 for rent (€5,000 or more in Dublin), and the balance for food, bills, travel, books/materials, mobile phone, and social life.

The recent Farm Report 2019 from ifac showed some worrying trends about financial wellbeing across the sector. For example, one in five farmers aged 40-65 do not have a pension plan and less than half (43%) have mortgage and life cover. This means the majority are neglecting financial planning, which includes planning for future costs such as third level education fees and often one of the biggest drains on family income.

James Farrell at ifac’s office in Tullamore said:

“Now that many graduate programme applications are open until the end of October, it’s a timely reminder to parents with children in school, at primary or post-primary level, to plan ahead. If at all possible, doing so will help to relieve this headache for parents when their children take that step towards their independence.  Setting up a small savings fund can really help to offset these costs when they arise.”

The following are the main considerations with education savings:

• Plan ahead – when do you need to have a pot saved by and how much will you need? Don’t leave this to chance especially if you have more than one child at school age

• Speak to a financial advisor and set up a savings account

• Decide, based on your level of comfort with risk, if you would prefer a deposit or investment savings account. For example, €200 per month over seven years on deposit, with an average of 1% growth per annum, will give you a pot valued at €17,400. The same investment with a 5% return would increase the pot to €20,150.

• Usually if it’s for less than five years a deposit account is best but anything longer and a savings plan that invests in growth assets, like shares and property, might be a better option.