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.

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.
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:

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 unbiased 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’ve spent the last 12 years helping young families in Singapore build a secure financial future. My background as an optometrist instilled in me a keen eye for detail and a passion for educating others – skills I now apply to helping my clients navigate the complexities of financial planning. I carefully analyze your unique situation, identify potential roadblocks, and create a tailored plan to achieve your goals.

I believe in building long-term relationships, growing with my clients through every stage of life. One of my most rewarding experiences involved guiding a young client, just starting her career, through her journey to first-time homeownership, marriage, and the arrival of her two children. Together, we established a strong insurance foundation, planned for her children’s education, and secured her family’s future, allowing her to focus on what truly mattered.

My commitment to excellence is reflected in my credentials as an Associate Financial Consultant, Certified Islamic Wealth Advisor, and a consistent recipient of the Financial Alliance Quality Class award for the last 8 years and MDRT membership since 2023. I’m here to empower you to make informed financial decisions, so you can focus on building the life you envision.

Embark on your journey with me today!

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