Planning now helps to mitigate the burden of education costs later

Every parent wants the best for their children and the best gift they can bestow on their children is to provide them with education. Education is the best gift to a child as it will equip him for life and aid them in meeting the challenges in a highly competitive working environment.

Providing the best education curriculum comes at a cost. This includes fixed expenses like tuition fees and also indirect outlays like food and transportation fees. The table below serves as a guide on the basic expenditure a child may incur in a month. Other than the basic expenses, there are costs associated with extra curriculums such as piano lessons, ballet classes, etc.

Cost of providing education increases as a child grows older. This is because not only does basic expenses rise, school fees also rises as a child pursues higher education. The rising cost of living has also caused tertiary education fees to move higher as illustrated in the diagram below.

Figure 1: Cost of education in Singapore
Source: Bloomberg

Given the ever rising cost of education, it pays to plan ahead so that you can send your children to the best universities. It is important to start planning for your child’s future education needs as early as possible as there is a cost to waiting.

How do I plan for my child’s future educational needs?

Step 1: Determine how much is enough to meet your child’s future education needs?

The very first step in planning for your child’s education needs is to estimate how much you will need to fund your child’s education. Check out our Children's Education Planner below to calculate the total projected cost.

Step 2: Establish the time frame you have to achieve the projected amount in step 1.

The amount of time you have to achieve your financial goal plays an important role in determining the asset class you could invest in.

For example, if your child is younger, you will be able to take on more risk which may allow you to invest in stocks. On the other hand, if you have less time to save for college, bonds or money market instruments might be a better solution for your funds. This is because ceteris paribus the longer our investment horizon, the larger our ability to take on more risk.

Step 3: Establish your investment strategy and start investing today!

Once you have identified the total estimated cost and established the necessary time frame, the next big step will be to identify the funds that will help you achieve your goal.

Check out our fund list. We have an array of funds to suit a diverse group of needs.

Think Big, Start Small

You can start small by utilizing our regular savings plan to meet your child's future education liabilities. A small amount every month goes a long way. So, do not procrastinate further and start today!

 Consult a professional and get on track

Still confused and unsure which funds will help you achieve your financial goal?

We are here to help! Contact our wealth consultants for financial guidance.