Funding your child's education

I just read this article in Sunday Times recently. It talked about the different ways of savings toward our children's education fund. I think this is a very important subject. Because many people do not seriously plan for their children, they think it still a very long time until their kids enter university.

Education is expensive! It's true. Even now, it's expensive already. Many students have to take up a student loan because the parents are not able to pay for the university's tuition fee.

If you are a parent your self, I'm sure you want to be able to give your kids the best education right?

If you can, you do not want to burden your kids with debt for their study right?

Then start planning now! Give the best future for your kids if you really love them.

20 years from now, just a local university education which is non-medical course will be about $60,000. If you have 3 kids, you would have to save at least $180,000. I think that is not a small amount of money for many people.

Let me share some quotes from the article which I believe are very important

1. "The key is to plan early and start saving as soon as the child is born".

2. "...when parents start saving earlier, the outlay can be smaller".

3."...with a longer time horizon, there are wider choices of funding vehicles to consider".

As for some of the key instruments for savings are:

1. Fixed deposits in the bank.

2. Endowment plans.

3. Investments : whether it's shares, unit trusts or investment link plan.

Take note that there are pros and cons for each instrument.
E.g. Deposits have limited return due to very low interest rate. Endowment has better return but there are penalty if you surrender before the maturity period. Investments have much more potential for superior return but can fluctuate greatly due to market volatility.

So go and discuss with your financial planner and see what's best for you.

                                                              Taken from Sunday Times

Remember this, the longer you wait to save, the less time you will have to save toward your child's education fund and the more money you have to put in. In other words, do not wait! It will be much harder on you and you are risking your child's education.


Cheers! Have a great day.