Survey: Most people in Lithuania aim to save EUR 5,000-10,000 for their children’s education

Saving for their children’s higher education is one of the most important goals pursued by people in Lithuania who engage in investment activity. This goal was indicated by 16 per cent of respondents who invest. It ranked third, after the goals of saving money for retirement (mentioned by 68 per cent of respondents) and having some additional income (27 per cent).

In planning for their children’s university or college studies, people in the country most often see a need to save between 5,000 and 10,000 euros: 32 per cent said 5,000 euros was needed and 28 per cent mentioned double that amount, while a further 17 per cent saw the need for more than 10,000 euros. Meanwhile, 6 per cent said 2,000 euros would be enough for their children’s studies, and 13 per cent of those raising children are not planning to save for their higher education.

On the other hand, 15 per cent of the country’s residents indicated their children should start being financially independent already from the age of 18. A third of respondents said 22 was the age when financial independence should begin, and 43 per cent said their children should support themselves financially from the age of 24. These attitudes were revealed by a survey of investment and saving habits commissioned by INVL Asset Management, one of the country’s leading asset management companies.

“The survey showed that saving money for children’s education is one of the most relevant investment goals and people generally target a rather substantial amount. On top of that, most people think that their children should become financially independent from the age of 22 or 24, which means parent’s would also need to help cover living expenses during their children’s studies in case they start studying after they finish the school,” said Ramūnas Stankevičius, the Head of Pension Funds & Retail Sales at INVL Asset Management.

Preparations for this, like for any big expenditure, need to start early, he noted. That means determining how much to allocate for education and related expenses and planning how to accumulate that amount, choosing savings and investment instruments based on your time frame and risk tolerance. Children should also be helped to start developing financial literacy habits as early as possible, while still in school, so they learn to live within their means, plan expenditures and save for the future. “Without good financial planning and preparation, the needs of a new college or university student can really unbalance a family’s budget and undermine its financial stability,” Ramūnas Stankevičius said.

Data from Lithuania’s Research and Higher Education Monitoring and Analysis Centre show that as of the end of 2015, 48 per cent of students at the country’s universities and colleges were paying for their studies (as they did not have state-subsidized places). Universities and colleges had total enrolment of nearly 134,000 students at the time.

The representative survey of investment and saving habits was conducted for INVL Asset Management by the research company Spinter Tyrimai in February this year. A total of 1,011 Lithuanian residents aged 18 to 75 were interviewed.

INVL Asset Management manages eight pension funds and five mutual funds. It is part of Invalda INVL, one of the Baltic region’s leading asset management groups. Companies in the group manage pension and mutual funds, alternative investments, individual portfolios, private equity and other financial instruments. More than 150,000 clients in Lithuania and Latvia as well as international investors have entrusted them with more than 340 million euros of assets.