I have started to think of this topic ever since QY was 5 months old. I deeply believe that higher education is the gateway to a child’s future. It opens minds, which leads to endless opportunities. Therefore, it would be the most expensive gift that a parent will ever and must give to their beloved child. Not only it is a ‘gift’ to our kids, it is also our responsibility as a parent to do so in view of the highly competitive environment.
I attended several financial planning topic on how to fund our child education lately, and I thought it is good to share with all parents who might interested.:-
1) Do nothing ~ Some parent may not think that saving for child education is as important as planning for buying house, retirement and etc. In their top 3 priority list, buying house, buying luxury car and others may have filled up the list. When times come gradually, this group of parent will have to apply for a study loan from a financial institute bearing the rather high interest rate and the prescribed repayment period. If a choice is given, do u still want to consider this option?
2) Scholarship ~ When planning for child education, we shouldn’t include scholarship. Whether our child receive a scholarship or other form of financial aid, this should be treated as bonuses to parent ONLY.
3) Save on our own ~ this can be saving in the bank or unit trust. But one thing for sure is we must start as early as we can, the earlier we start the more time we have to compound and help grow our money. It is of one method to save for child education but the bad side is if the parent die, this method will have to put on hold or get discontinued.
4) Education plan ~ this is my preferred method. It is as simple as saving on our own, but just switching from saving in bank to insurance company. Instead of deposit the monthly saving of 300 or 500 in the bank, just putting the money into an insurance education plan. It is very important to safeguard the child's welfare should either one or both parents die or become incapacitated. And this can be safeguard through the plan which incorporates proper risk management - such as an education plan.
Some of my mommy friends told me they never think or plan such a long tem matter like child education. I would think that most probably I received my dream tertiary education overseas, sponsored by my dearest parent. This in turn has made me feel want to pass this 'excellent thing' to my beloved child. I would not want to just apology to my child that I can’t support them for higher education because of no planning or no monetary preparation beforehand.
I am not expecting or hoping my child are high scorer with flying color result, but at least they are given the opportunity to go through and enjoy the wonderful university life, just like mommy. I'm grateful for all that I have, own and understood. Thanks to my parents for everything and also fulfilled my dream to study in overseas country.
Those are the days which I treasure very much in my life......
