Wednesday, February 17, 2010

Planning for Kid's Education

Source: The Moneysense Guide to Planning for your Family's Financial Future
*** my non-professional comments/opinions are in italics.



For parents like me, I would assume this would be one of the biggest concerns of having kids - be able to provide good education for them up to their university years. We all know that education costs increase in time, sometimes even more than inflation. So it is just wise to know how much we should be saving for our kids' education.

Based on the table above, a 4-year university course could cost us $13,500 x 4 = $54,000 now.

Few years from now, for our first-born child, expected university costs would hike up to 
$54,000 x 1.29 (Chart B) = $ 69,660, that is 13 years from now.

The earlier we start saving, the better. This means we would be saving a small amount every month till we get the target amount. Or we could save and invest the money to get more returns.

In our case, we have a specified monthly savings just for our kids' education. We call it our edufund. We do invest it sometimes, in short-term ventures. The most important thing is that their future education is secure.

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