LEIBA-BARNES

This is the fifth instalment of a feature sponsored by Capital and Credit Financial Group.

Moya Leiba-Barnes, general manager at Capital & Credit Merchant Bank, outlines some basic steps parents can take to begin the process of building a fund to cover the cost of their children's education, even in challenging economic times.

She is responding to a question from a reader: I have two children in school - one goes to a primary school and the other is in third form at a high school. My partner (who is not their father) and I earn just about $75,000 per month. He is a mason and I work as a secretary in a small establishment. My children are very bright and I want to provide them with the best education possible. How can I save to ensure that they can go on to college/university when the time comes?

According to Leiba-Barnes, "A mantra we have at Capital & Credit is 'Every mickle mek a muckle'. It matters not how much you earn, there is always something you can put aside," she asserts.

The seasoned banker advises:

1. Begin by establishing how much money you take home.

2. Then determine how much you need to spend. Remember how much you spend and how much you need to spend is usually not the same. Persons often complain that there is nothing left over, no excess. But there is usually something you can cut back on - like the electricity bill, buying produce at the market rather than at the supermarket - that will give you a little extra money every month.

3. Make a commitment to save this amount every month, no matter what. Think of it as a partner. Every month you must 'throw your hand'. In this instance, however, Capital & Credit is your banker. The difference is, you won't be paying the banker anything at the end of the partner. Instead, the banker will pay you in the form of interest earned.

4. Once you have established a routine of saving monthly, you must now begin to consider how to grow those savings in the years leading up college/university. First, you need to determine how much time you have left before college/university or maybe skills-training school. The reader said the older child is in third form, which means he/she has about four years left in high school. The other is in primary school and won't be ready for tertiary education for at least another six years.

5. Consider an instrument that helps you achieve your goal faster. At Capital & Credit, we have the Capital Investor Plus (CIP) where, as your balance climbs every month, you can earn higher rates of interest. You may open an account with as little as $1,000 and earn as high as 13.5 per cent.

6. After a year or two, consider diversifying your funds. You may take some of the money you have accumulated in your CIP and buy highyielding Govern-ment paper, for example. At this time, interest rates go as high as 21 per cent and you could keep that there for two years. Once you get the interest you may add it to your savings.

7. Add any surplus you might receive (bonuses, gifts, etc) to your account.

8. Stay focused. No matter what life throws at you, remember to keep your eyes on your goal. But if circumstances arise and you need money, the CIP allows you to borrow up to 85 per cent of your balance. That way, you get the money you need for whatever eventuality and your balance is still there earning interest.

For more information and advice on how you can save for your children's education, send your questions to editors@gleanerjm.com. Moya Leiba-Barnes and the rest of the team of experts at Capital & Credit will answer online, in print and on air. Read The Gleaner next Tuesday. Log on to the Gleaner's website www.go-jamaica.com. Tune in to 'Real Business' on Power 106 at 9:35 am. on the last Tuesday of every month.Real money business, in real time, for real people!