Many expatriate parents feel comfortable placing their children at international schools rather than at local schools. The benefits of a private international school is the peace of mind that their children are being educated to an international standard that applies back home too. Some expatriates are fortunate enough to be offered contracts with school fees contributed by their employer, but for the many who don’t it is a case of having to put money aside to give their children the best possible future.
Next to buying a home, a college education might be the biggest purchase a person makes after buying a home. For example, average tuition costs in the UK is around GBP 3.500-20.000, in Canada prices vary between CAD 15.000-CAD40.000, while in the US it is between USD 20.000-USD 50.000. As it can be observed, where parents wish to educate their children will dictate the cost. The cost of educating a child in the US is far greater than Canada or United Kingdom.
Education costs have significantly increased over the last decade and according to the College Board these costs will keep climbing.
Of course, no one can predict the cost of education at colleges in 5, 10 or more years. However, following historical trends annual price growth in the range of 4-7% will most certainly continue.
Therefore, in order to ensure that children get the best education that they deserve, early financial planning is important.
Setting up an Educational Plan early gives your money more time to grow and help you benefit from the power of compounding.
Below is a hypothetical example of a Standard Education Fee Planning if you save GBP 1000 over a period of time:
|Time||Total Savings||2% growth p.a.||5% growth p.a.||8% growth p.a.|
|10 Years||GBP 120000||GBP 132719||GBP 155282||GBP 182946|
|15 Years||GBP 150000||GBP 209713||GBP 267288||GBP 346038|
|20 Years||GBP 240000||GBP 294796||GBP 411033||GBP 589020|
As we can see, even a modest monthly investment can grow to significant university fund, by the time your child needs it.
Our experienced consultants offer expert advice on how to plan for education costs and also how to prioritize your investment money if time and/or funds are limited.
I hope that you have enjoyed reading this post.
Kuala Lumpur : Malaysia