Saving Up for Your Children's University Education in Singapore

Six Things to Remember When Planning for Your Children's Uni Education in Singapore

Education is a top priority for parents in Singapore, and ensuring that your children receive a quality education can be a significant financial commitment. Some parents may also want their child to take up specific courses such as medicine or dentistry which are more expensive than other courses in university.

With rising tuition fees and other associated costs, it is essential to plan ahead to ensure that you can provide for your children's education without straining your finances. Here are some steps to help you plan for your children's education costs in Singapore.

1. Start Early

One of the most important aspects of planning for your children's education costs is to start early. The earlier you begin saving and investing, the more time you have to grow your funds. Consider opening a dedicated education savings account or investment plan with a reputable and licensed financial institution/advisor as soon as possible to maximize your savings and take advantage of compounding interest.

2. Set a Realistic Future Budget

It is crucial to set a realistic budget for your children's education expenses. Firstly, choose the university that you intend to send your child. Take into account factors such as current tuition fees, textbooks, uniforms, extracurricular activities, and any other costs associated with their education. Research the current and projected costs of education when your child becomes of age to enter university. As a ballpark figure, you can use 3% inflation per year to project future education costs.

You can find the latest NUS student fees here :)

3. Explore Education Savings Plans with MAS-approved financial advisor representatives

In Singapore, there are various education savings plans available that can help you save for your children's education. These plans often come with welcome bonuses and incentives such as partial withdrawals without any charges upon your child entering tertiary education. Taking up an education savings plan provides a disciplined and guided approach to saving as compared to investing in the stock market. If you are looking for shariah-compliant options, look for advisors that provide investments in shariah-compliant unit trusts or funds.

4. Invest Wisely and Consistently

Investing wisely and consistently is crucial to grow your savings for your children's education. As the saying goes "Time in the market is better than timing the market". Consider consulting with a financial advisor with a background in finance and investments who can guide you on suitable options based on your risk tolerance, time horizon and financial goals. Remember to diversify your investments across different sectors and geographies to minimize risk and maximize potential returns.

5. Explore Scholarships and Financial Assistance Schemes

Explore different scholarships provided by organizations and encourage your children to excel in subjects that are required by those organizations. This may include academic subjects or relevant extracurricular activities such as sports or special interest groups such as coding and robotics.

You may also explore bursaries, scholarships and financial assistance schemes offered by community non-profit organizations such as Mendaki, LBKM, 4PM to encourage youths to excel in education. Keep up to date as there may be application windows that you need to take note and apply accordingly.

6. Review Periodically and Adjust Your Plan

This is where having a financial advisor comes in handy. Schedule a review with your advisor every 6 months or 1 year to review your investment portfolio and see whether there is a need for any adjustments based on market conditions.

Also, stay informed about changes in education policies, shifts in societal trends and emerging technology such as artificial intelligence which may impact your child's course of study and also the cost of education. Make necessary adjustments to your savings and investment strategy to ensure you stay on track.

In summary, planning for your children's education costs in Singapore requires careful consideration and proactive financial management. By starting early, setting a realistic budget, exploring education savings plans, investing wisely, considering scholarships and financial aid, and regularly reviewing your plan, you can ensure that you provide for your children's education while maintaining financial stability.

If you need advice on setting up an education plan for your child, I can provide a complimentary review of your situation and how you can start a plan based on your budget and time horizon.

Syukri Ismail