Thought of the day: A Guide to child education planning

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Thought of the day: A Guide to child education planning

Postby audrey78 » Wed Jan 13, 2010 4:19 pm

I find that one of the most important things of planning ahead for your child include its long term education planning which of coz include endless child enrichments classes, kids gym, swimming and music lessons, of coz nonetheless to speak, all this cost alot of money. And many of us lack information and are lucky to be educated enough to plan ahead for your children while you are investing in your childs talents today for his/her success tomorrow.

Apparently only ever since i had a talk with my personal financial planner then i am educated about its importance. So i thought i share it. I used to only understand retirement planning, saving needs etc, and my advisor gave me a new lesson so i thought ill share it. So all parents do not neglect planning your child's future today. :)

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Postby mummy of 2 » Wed Jan 13, 2010 5:09 pm

Actually I think that planning for a child's education is a a nice-to have ie you contribute towards it only after you have met all your other financial obligations.

My reasons for stating this are:
1. Education need not be costly. Enrichment classes that cost an arm and a leg may not be able to provide the "advantage" that they claim. Parents can help guide their children. It takes time and effort but I believe it is important, and could be more beneficial than letting an outsider take charge of your child's education. Enrichment classes may help your child gain knowledge in certain areas, but it is more important to cultivate the ability to think and digest information, the interest to learn, and of course the soft skills to succeed in life.

2.Education can be funded in other ways, such as scholarship, bursary, or study loan. But ohter financial obligations can't be met this way. Who's going to lend you money after your retirement?

3. Your child will likely appreciate the chance to go for further education better if he/she has to contribute towards it, for example by working part-time or during the school holidays.

As parents, we can and should help our child prepare adequately for their future, but it may not be necessary for us to do it financially. It is also important for us to take care of our own financial needs, so that we do not become a burden to them in our old age.

JMHO.

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Postby audrey78 » Wed Jan 13, 2010 5:26 pm

Hi mummy of 2,

i totally agree with you. It is definately of much more value should our children work for their education in contributing to it by working part time or such.

Personally, i grew up with a single parent. Therefore i have always supported myself through school and eventually university in Australia and eventually had a scholarship and finally even graduated with honors.
However, many a times i did wonder if i never had to work and study would i have done better? Of course i would never have felt and valued my education as much since the process was not easy but then again on the other hand i did wished i had financial support too but sadly my mom was willing but unable to. Thank God of course for scholarships and bursaries :)

so i do agree with you. :)

But education planning is surely like you mention a nice to have only if the family is comfortable financially to support it. And personal financial objectives are not any lesser important like retirement.

well if you have a education plan it does not necessary mean your child will definitely have a use for it since he/she may have a scholarship later on. and the money can always go back into your own retirement planning say tour the world with your husband later on? :)

so im sure no harm and either way is also fine

cheers!

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Postby mummy of 2 » Wed Jan 13, 2010 5:40 pm

I can understand how you feel about wishing your mother could help you out in some way. But I'm sure having to rely on yourself has made you a tougher person.

For me I will not let my kids know that I will finance their higher education, even if I can afford to pay for it. In fact I plan to make it very clear to them that I will NOT pay for an overseas education. So they better study hard and make it to local uni if they want to get a degree.

I guess there's no harm in planning for them, as a back-up, but I do not think endowment plan/education-related policy is ideal, as you have to commit to the amount for a long period of time.

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Postby kaitlynangelica » Wed Jan 13, 2010 6:00 pm

mummy of 2 wrote:I can understand how you feel about wishing your mother could help you out in some way. But I'm sure having to rely on yourself has made you a tougher person.

For me I will not let my kids know that I will finance their higher education, even if I can afford to pay for it. In fact I plan to make it very clear to them that I will NOT pay for an overseas education. So they better study hard and make it to local uni if they want to get a degree.

I guess there's no harm in planning for them, as a back-up, but I do not think endowment plan/education-related policy is ideal, as you have to commit to the amount for a long period of time.



Even a local uni education will cost about $100k + in 20 years time. So we also have to do some planning to achieve that amount. I think as parents, that is the bare minimum we should do if our other financial obligations are met. Not fair to have them and then not try to finance their uni education.

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Postby mummy of 2 » Wed Jan 13, 2010 6:02 pm

I'm not saying that we do not contribute at all. Just that we should take care of our own financial needs first :D

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Postby thefashionpill » Thu Jan 14, 2010 12:17 am

hi kaitlynangelica

true and totally agreed.
btw, mummy of 2, do u have other savings options that im unaware of, coz currently as of such, my returns for each plan is on the average of 15% per annually although it is really for long term commitment. But if u have a better saving alternative please kindly share with me.

i believe in saving and curbing the inflation, and even fixed deposit savings dont get me that kind of returns and therefore i trust my financial adviser after so long coz i know some of them really promise you this and that like my previous adviser but end up losing money and such. so thank god currently my adviser proved to pretty accountable and such.

but of coz if there are alternatives you know of to saving please kindly share especially if you can curb inflation and not have to do long commitment.

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Postby ZacK » Thu Jan 14, 2010 12:47 am

thefashionpill wrote:my returns for each plan is on the average of 15% per annually although it is really for long term commitment.


I thought you should qualify your statement, otherwise others reading this may have the misconception that they can expect 15% returns from their education policies.

I believe what you are referring to is an investment-linked policy, where it operates quite similarly to a unit trust, except that you have the benefit of having insurance protection... In this instance the value of your policy is pegged to the market value of the units in your policy.

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