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3 Factors You Must Know Before Saving for Children University Funds
- September 26, 2023
Many parents will agree that one of their most defining moments in life occurred at the birth of their child. A child is a blessing from above and he/she is seen as a ‘continuation’ of ourselves when we depart from planet Earth. As such, many parents would want to have a glorious ‘continuation’, by planning for their children from the school they must attend to even making it a personal goal to buy a house for their children. It is also no wonder that many parents would purchase education savings or investment plans in order to save up for the hefty university fees for their children in future. However, there are “must-knows” factors to consider first before we embark on education fund planning for our children.
1. Is children education planning necessary?
2. When shall we start planning for children education?
Before a plane ride, we will watch an air safety video or the stewardess explaining that in the event of the oxygen mask popping out of the console due to a low oxygen environment, be sure to fix the mask on yourself as a parent first before fixing masks onto your children. Why? Because only when you can survive first, then you are physically abled to assist your children. Should you help your children with the mask first and you pass out after that, your children may not know how to save you, especially if they are too young. The concept is the same with retirement planning: only when you can survive on your own upon retirement, then you can allocate extra resources today to help plan for your child’s varsity funding.
I know the above point may not rest well with many parents who would have the ‘objection’ which is stated in point number 3 below.
3. “I must pay for my child’s university education so that he will be able to get a good job with a good income after graduation and without any school loan to repay, he can take care of me when I retire”
The best gift a parent can give their children is not just about funding their varsity education. It is also the ability of us as parents being able to take care of our own finances as well as health and medical expense (through medical insurance) upon retirement, instead of putting extra financial strain on our children. As for university funding, the government currently allows us as Singaporeans or SPRs to lend monies from our Central Provident Fund Ordinary Account (CPF-OA) to our children to pay for their local university fees; if insufficient, our children can also source for a temporarily interest-free loan from a local bank and start repaying with interest after graduating.
In order for parents not to fetter their children financially in the future, let our ‘present self’ take care of our ‘future self’ first before looking into children education planning.
The author of this article, Mr Sean Ong is a Certified Life Coach, a Master Practitioner in Neuro-Linguistic Programming and a Chartered Financial Consultant who has been featured on the local TV and radio, having begun his career in the finance industry since year 2002. In his efforts to contribute to the society, Sean ran 1,000 km over 87 days to successfully raise more than $13,000 for a children charity in year 2012. He also published a book subsequently where sales proceeds were donated to charity. Sean completed his Masters of Science Degree in Technopreneurship & Innovation in year 2020 and was honoured in the Director’s List for academic excellence. He has keen interests in InsurTech projects and mental wellness initiatives for the youths. Above all, Sean counts knowing Jesus Christ as the most significant event of his life. He can be contacted at seanong@ippfa.com.
Financial planning involves establishing goals, working out what assets and liabilities you have, evaluating your current financial position, developing a plan to achieve the goals, implementing the plan, and monitoring and reviewing the plan whenever needed. The main goal of a financial plan is to achieve financial freedom and this cannot be done without doing the 4 things below:
