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How Much do I Need for my Children’s University Education?

“What is the inflation rate of University education?”
is a question some have asked me recently while on the topic of planning for their children’s education.
So to answer your question, here is the annual inflation over the last 20 years for just the education sector in Singapore tabulated in this chart.

How Much do I Need for my Children's University Education? — Engage

Interestingly, the average headline inflation(all items) for this same period was just 1.54% but for the Education sector alone, it was 2.88%.
How is this helpful in planning for funding your children’s future education needs?
You would probably notice that in the last 20 years, there were 2 years the inflation hit 4% and above. Thus, it would be prudent to use an estimated inflation of 4-5% in our planning.
“How much do I need for my children’s University fees then?”
is usually the question which follows.
How Much do I Need for my Children's University Education? — Engage
Based on the published fees, a degree would cost somewhere from $32,000 to more than $170,000 depending on the field of study.
This is not including living expenses such as hostel accommodation, study materials and more.
Still, it is the goal of most parents in Singapore to provide university education for their children as many view it as a gift- the gift of a successful life.
After all, Singapore’s economy which was once based primarily on trade, is now one of the world’s leading global cities and a global financial hub thanks to its forward-looking world-class education system.
How do I save $79,000 – $90,000 for Business, Accounting or Engineering and more than $400,000 for Medicine?
Here are some options:
  • Save in the bank, $500 a month per child, 18 years, $108,460 (0.05% savings account rate)- enough for Business/Accountancy
  • Save in a children’s education plan, $500 a month per child, at 18 years, get $141,612 (2.95% returns)- enough for Law

Or for Medicine

  • Save in the bank, $2000 a month per child, 18 years, $433,841 (0.05% savings account rate)
  • Save in a children’s education plan, $1550 a month per child, at 18 years, get $433,549 (2.95% returns)
  • Save in an investment plan, $1300 a month per child, at 18 years get potentially $438,865 (~5.00% returns)

Pros & Cons of Saving in the Bank, in an Insurance type Education plan and Investment Plan:

How Much do I Need for my Children's University Education? — Engage

Some are deterred from saving in an education type savings plan or investment plan due to the fixed commitment period.

However, would you not agree that high commitment = high chance of reaching your goal?

The low commitment and high flexibility of saving in the bank often means we do not achieve our goals because it is all too easy to skip saving a month, two months… and then stop.

If you definitely want to see your children through to University, then you need a definite savings plan drawn up too.

What would be the most suitable plan for you? It could be one of the options mentioned above or even a combination.

Find out more by scheduling a planning session today!

 

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Published By:

Jillinda Hoan

“The sweetest satisfaction lies not in climbing your own Everest, but in helping others climb theirs” by Max Lucado resonates with me.

I strongly believe in the importance of helping families and individuals make wise financial decisions so that they can enjoy peace of mind and focus on their priorities and what truly matters in their life.

Over the years, my passion for helping clients achieve their goals has helped me to develop a systematic approach to diagnosing potential financial issues in a family or medical situation as well as roadblocks to short-term and long-term financial goals.

I enjoy understanding each family’s needs and unique circumstances before designing suitable solutions, while adapting to their changing needs along the way.

Making a difference in the lives of those I meet, enabling them to make sound financial decisions to navigate them on the path to success is a daily motivation for me.

Can I make a difference in yours?
Find out in an exploratory discussion here!

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根据《个人数据保护法》，鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料（例如姓名，证件号码，联系电话，邮寄地址，电邮地址和照片）。 该政策可在本公司网站上查寻，网址为 https://fa.com.sg/data-protection-policy/.

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  • 我已阅读并理解鑫盟理财私人有限公司的个人数据保护政策，并同意鑫盟理财私人有限公司根据个人数据保护政策所阐述的用途使用我的个人资料。
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  • 鑫盟理财私人有限公司的代表或员工并未直接与我联系或提出要约或招揽购买我原居住国境内所不提供的任何金融产品.
  • Financial Alliance Pte Ltd ( “FAPL”) is licensed by the Monetary Authority of Singapore (“MAS”) and allowed to conduct financial advisory activities in accordance with the Financial Advisers Act (Cap. 110) (“FAA”) and the Securities & Futures Act (Cap. 289) (“SFA”) within the jurisdiction of the Republic of Singapore and in accordance with the licenses granted by MAS
  • 鑫盟理财私人有限公司( “鑫盟理财”)持有由新加坡金融管理局(“MAS”)所颁发的牌照，并许可在新加坡共和国境内依据财务顾问法（第110章）和证券与期货交易法（第289章）进行财务咨询等相关业务
  • Any services provided by FAPL to persons not ordinarily resident in Singapore are provided solely on an offshore basis from Singapore, resulting from direct enquiry on the part of the foreign residents.
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  • As an integral part of the provision of such services, FAPL may from time to time make available to such residents, documents and information making reference to capital markets products (for example, in connection with the provision of fund management or investment advisory services outside of the foreign jurisdiction).
  • 作为提供此类服务的一部分，鑫盟理财会不时向此类咨询者提供有关产品的参考文件和信息（例如，关于海外司法管辖区以外的资金管理或投资咨询服务等信息）。
  • Such documents and information are provided by Financial Alliance Pte Ltd (“FAPL”) is for general information only and is not intended for anyone other than the recipient.
  • 此类由鑫盟理财所提供的文件和信息仅供收件人做一般信息参考。
  • It does not take into account the specific investment objectives, financial situation or particular needs of any particular person.
  • 此类文件和信息不会把-个人投资目标，财务状况或其特定需求等考虑在内。
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  • 鑫盟理财向该人士提供此类文件和信息将不构成要约或招揽购买或出售或认购任何此类资本市场产品，或达成交易或参与任何特定的投资策略，也不构成有关此类金融产品的建议或推荐。
  • These documents may not be published, circulated, reproduced or distributed in whole or in part to any other person without FAPL’s prior written consent.
  • 未经鑫盟理财的事先书面同意，不得将这些文件全文或部分发布，传播，复制或分发给其他人。
  • This document is not intended for distribution to, publication or use by any person in any jurisdiction, where such distribution, publication or use would be contrary to applicable law or would subject FAPL and its related corporations, connected persons, associated persons and/or affiliates to any registration, licensing or other requirements within such jurisdiction.
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  • You shall ensure that you have and will continue to be fully compliant with all applicable laws in your home country when entering into discussion or contracts with FAPL.
  • 在与鑫盟理财进行讨论或签订合约时，您应确保您已完全遵守并将继续遵守您所在原居住国的所有适用法律及条规。

In compliance with the Personal Data Protection Act, Financial Alliance Pte Ltd (“FAPL”) seek your consent to collect and use your personal data (e.g. name, NRIC, contact numbers, mailing addresses, email addresses and photograph) for the purposes of and in accordance with FAPL’s Data Protection Policy, which can be found on FAPL’s website at https://fa.com.sg/data-protection-policy/.

根据《个人数据保护法》，鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料（例如姓名，证件号码，联系电话，邮寄地址，电邮地址和照片）。 该政策可在本公司网站上查寻，网址为 https://fa.com.sg/data-protection-policy/.

By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.

提交此表格，即表示您已阅读并理解鑫盟理财私人有限公司的个人数据政策