Succeeding in life through luck is sweet. But using education to unlock the mysterious locks that keep people struggling is unmatched. Every parent’s dream is seeing their children succeeding in education and carving a path to glory.
More often than not, these dreams remain to be just that, dreams. This vicious cycle of unattainable dreams occurs due to the high cost of education. For instance, in the recent past, Singapore has recorded one of the highest inflation rates globally. Would you believe that the inflation rate for education in Singapore is 21% more than the overall inflation? Sadly, this is the case and parents have to dig deeper into their pockets to educate their children.
Dealing with the Rising Cost of Education in Singapore
The world is going through an economic crisis and Singapore is not an exception. Education is becoming too costly for Singaporean parents.
A recent report by CNBC News showed that university education had skyrocketed by a whopping 38% since 2007. See, in 2007, you would part with an average of SDG $6,500/year at the university to study a degree in science or general arts. The last updated figures show that the same degree course now costs between SDG $8,000 to SDG $11,000, or an average of SDG $9,500 for the same degree course. That is close to 50% of the initial cost.
A case study is Singapore Management University (SMU), one of the most expensive universities. In 2007, you would have to part with SDG $7,500/year to study a degree in the university. The same degree was costing SDG $11,300/year in 2019. It is expected that the cost will continue to rise as time goes by.
As a parent, you cannot stay in the state of pity party hoping for the costs of education to go down. You have to provide your child(ren) with the best education by saving for child education in advance. After a deep research, we identified five main hacks that you can implement to see your child learn seamlessly.
What are the Smart Ways to Save for your Child’s Education?
Without further ado, let’s take a look at how you can create a prudent financial plan for your children:
1. Start saving early
From the current economic trend, it is evident that inflation is not going to end in the foreseeable future. That’s why early childhood education must be planned in advance because it will serve as the forming years of your child. Primary school tuition fee plus living expenses especially if you are in Singapore can be costly.
Saving for children’s education can save you from skyrocketing tuition fees and other dilemmas related to university education as your child grows up. Accumulating money for your child’s education ensures that you have enough for them. There are two tips to help you save early.
Make an estimate of the cost of your child’s education cost. Estimating the cost of education is like a nightmare, given the high inflation rates. The only way to make a near-accurate estimate on the child’s education is by making an upward projection in savings. For instance, if the current cost of a degree course is SDG $12,000/year, you should save SDG $17,000.
Create a savings plan. Saving money for future use requires a lot of discipline, hence the need for a savings plan. To create a savings plan, you need to open a fixed savings account. Anytime the salary gets to your account, a certain percentage is deducted to the savings account. If you opt to save SDG $200/month for 4 years with a simple interest of 5%, you will have SDG $10,080. Saving early will help you overcome the challenge of raising fees when the young one(s) attains the school-going age. Check out the best children’s savings account Singapore.
2. Choose to live simpler
At some point, you might find yourself at crossroads especially adjusting lifestyle. Shifting from using a sports car to public transport to save money might seem a dream far-fetched. However, sacrificing comfort to save more for your child’s university education is prudent.
Instead of eating in high-end hotels, why not prepare the food at home? You could save just SDG $40. On face value, 40 bucks might appear like a drop of water in the ocean. However, if you forego 10 meals in the hotel every month, you will have saved a cool SDG $400. This amount could go a long way to help improve your child’s education plan.
Most parents in Singapore overlook the massive education materials on the internet and opt for tuitions to appear trendy. Ironically, the information on the internet is more comprehensive and up-to-date. You can create a free account for your kid and save on the cost of tuition. To some people, adjusting to a simple life might appear as a punishment. However, this strategy helps in cost-cutting.
3. Get the best education financing loan
Regardless of the discipline in saving, some parents might find the cost of education too costly for them. If you fall under this category, you can opt for a loan or insurance policies to facilitate the child(ren)’s education. There are hundreds of institutions in Singapore that offer variety to students, for instance, early childhood development agency under the government of Singapore.
However, the interest charged by these institutions might be too high for the ordinary parent. You can avoid the high costs of education loans by applying for loans at institutions that charge lower interest. You can also inquire with your state whether they offer loans to students. Make sure that your loan issuer disburses the funds in time and you can afford their monthly charges.
4. Develop an investment plan
You should treat savings towards your child’s education as an investment, rather than a liability. When saving, you should compare fees in different schools. If the teaching standards match your expectations at a lower cost, go for it.
Some schools offer insurance plans to secure the future of the child’s education and the maturity payout can be used in your child’s tuition fee. In case of future uncertainty, the insurance company funds the child’s education that is known as endowment plans, This endowment plans are like a hybrid investment that will help you set aside money for you child’s education or college course. The endowment plan might be costly in the short-run. However, it goes a long way to help the children when the insured risk occurs in the future.
5. Manage your child’s expectations
Children can be cheeky and picky when it comes to balancing education and getting goodies. However, this only occurs due to poor guidance from parents. It is your responsibility as a parent to show them why foregoing a burger to learn is better. Although your stance should be firm, it should be coated with love and care. You need to tell them that saving for their fees will help them get the whole fast food or going for that vacation. Teach you, child, early how to save for their education and help them understand that good education can take them to better places.
At Loan Advisor, we work closely with parents to secure children’s future through education. We are committed to ensuring that parents get affordable and reasonable loans to learners.
We also offer consultancy services to parents and their children for better utilization of loans. Our beneficiaries get these services for free. You could be the next beneficiary of this incredible service. So, what are you waiting for?