Ask the Expert Series: Post 2020 Budget
What is the best way to plan for your child's education? How much should I set aside for my child's university expenses etc. How to start saving for this early?
It's a general rule of thumb to save up around 5% of your income in preparation for our children’s university fees. Take a look at how much you already have, estimate the cost of their university, look at how much you need to have at which age. Then access the rate of return you need and most importantly, the risk you can afford to take. Besides going to your financial advisor who can advice you of the amount required, there are easy calculators which can guide you to this. You can download PolicyPal app for free and use their calculators. Personally, I will not want to take excessive risk on investing this education fund. I'd prefer it to be guaranteed or with a very high guaranteed component. Therefore, endowment plans can meet this goal. Again, before we set aside money for children’s education, ensuring that the parents are sufficiently insured is important. The goal of education funding can be achieved only when the breadwinner(s) is healthy and employed.