Funding for Third Level Education

The current average yearly cost of third level education in Ireland is around €6,200, assuming your child is still living with you at home. This includes college fees, transportation costs and general ad hoc financial support.

If you are in a position to start planning for this well in advance you have a couple of options. Invest a lump sum now to meet these costs when required, or save regularly to accumulate the fund over time.

Most people will aim to accumulate the fund over time. Say you were targeting a fund of €20,000 in 10 years’ time for your child’s third level educational expenses. If you invested monthly in a savings policy achieving 3% yearly growth over this period, you would need to save €141 per month.

In terms of investment risk, when considering what type of investment funds to use think about the savings term and premium frequency. In the example above you will really be making 120 individual investments over the term of the savings plan (12 monthly payments x 10 years), so you can afford to invest in ‘riskier’ growth assets such as equities. Should the markets fall in any given month your next premium will simply buy more units in the underlying fund, so take on as much risk as you are comfortable with, and it should pay off as long as you have time on your side.

Andy Dixon Harvest Financial Services contributed to “Budgeting for a little bundle of joy need
not be a catastrophe” in Sunday Times in May 2022.