Education Planning : Education Planning Concerns For Families With 2 Children And More
Every parent knows saving up for the funds for their children’s education is important. From normal savings accounts, to endowment plans to investment tools, everyone probably has used what he/she personally deem as the most appropriate way of savings up.
There is no one right way to education planning. Whichever way, I am pretty sure you will be able to attain that goal if you are planning for just one child’s education funding. But what if you have more than 1 child? What if you have more than 2 children?
I recall before my son was born, my girl just barely started going to childcare. Whenever the notice from school came informing of an excursion or an enrichment or concert, it was easy to decide if I would to allow her to join in. Even to the extent of the number of sets of uniform, I recall purchasing 4 sets to make my laundry easier and more manageable.
2 years later, when it was time for my son to join in the childcare scheme, it was a total game changer. Every single expense simply multiply by 2. I believe every parent with 2 childcare-going children will be familiar with the 10% sibling discount. Is that really a lot of savings for us? Maybe. Depending on the school fees, you can easily save up to a few hundred dollars a month.
Link, ECDA ChildCare. 2017. Statistics_on_child_care(STENT).pdf. [Online] 14 August, 2017. https://www.childcarelink.gov.sg/ccls/uploads/Statistics_on_child_care(STENT).pdf.
Basing on the above statistics, let’s look at the difference in the costing for a family with one child versus one with 2 children
Assuming without the sibling discount, the fees above (after factoring in Working Mother Subsidy) would simply multiply by 2,
$567 x 2 = $1,134
With the available sibling discount, the fees for 2 childcare-going children, we pay instead $1,047.30. That makes it a savings of $86.70 a month, not a very huge amount of savings.
If this is the case during childcare days, what about during their tertiary education years? Would we be having any cost savings? The answer is a NO! Henceforth, it is important for all parents to plan for tertiary education fees as each child. But before we plunge into savings for the sake of saving, there are some pointers that you would want to take note of first.
Factors To Consider Before Planning
- Age gap between your 2 children?
- Gender of the children
- Tertiary Savings Goal
How Does These Factors Affect
1. Age Gap Between Children
Like I have mentioned earlier, I have 2 children who are 2 years apart; my daughter being the elder among the 2.
Unlike the usual common commitment of 4 years of financing a degree course, in my situation, my commitment is lengthened to twice the duration.
In the case of the opposite with the son being elder and similarly 2 years apart,
In this scenario, the course fee payment term is not affected but instead it doubles the amount payable as both child would be taking their degree course together.
2. Gender of the children
If like myself, you have one boy and one girl, the previous illustrations already show you what you would have to expect during their pursue of their degree education.
But what if you 2 boys or 2 girls?
Regardless of whether both children are boys or girls, if they are of the same gender with 2 years age gap, it not only lengthens the usual 4 years of education funding years(as compared to diagram 2), there is also a good 2 years that they will both be in university at the same time. In such case, there is 2 years where your liability of the fees double until your elder child completes his tertiary education.
3. Tertiary Savings Goal
Discuss with your spouse if you all would want to save towards a diploma education or degree education for your children. The type of tertiary course will affect not only the end savings goal that you need to achieve but it also helps to determine the time frame you will need.
- 2017. Course Fees and Fee Payable | Singapore Polytechnic. [Online] 11 December, 2017. [Cited: 29 December, 2017.] https://www.sp.edu.sg/wps/portal/vp-spws/spws.fsu.financialmatters.coursefeesandfeespayable.
- 2017. Tuition Fees – Full Time Programmes. Nanyang Technological University. [Online] 11 December, 2017. [Cited: 29 December, 2017.] http://www.ntu.edu.sg/NSS/NSSFinance/FeesTuitionGrant/Pages/tf_17.aspx.
How Can We Plan For The Necessary Education Funds
Now that we have looked through the factors to consider, how can we plan for such education fees then?
1. Identify when you would need to have such funds
A common mistake most parents make when saving for a child in most planning is to have savings plan that only matures after the child completes his/ her tertiary education. You would want the funds ready before the course starts
2. Calculate what is the school fee amount that each child would need
We cannot decide the course that our children will pursue. No one can tell the future. But that does not mean we cannot plan. Take the average of cost of a degree or diploma as a guide. And with this, include inflation of 3% in to have a rough estimate of what is the amount that you would be looking at.
For a reference of the course fee of the common diploma and degree courses available in Singapore, download the “Tertiary Education Course Fee in Singapore Reference” that I have prepared.
3. Workout what is your comfortable commitment towards savings towards this goal
As much as it is important, we cannot simply park 100% of our earnings just towards this savings goal. Be realistic about the amount that you need to set aside. A savings goal is better worked towards in stages rather than not doing it at all.
Bringing up one child is not easy. Bringing up more than one child is a challenge. The end result of this challenge is great parenting achievement.
Now that you know the consideration factors and how to go about doing it, you are ready to get into deeper discussion with your financial planner what can be done to assist you in reaching this goal.
Article by Pamela Chong
The writer is a Associate Manager representing GEN Financial Advisory