MILESTONE 6: Financing your children’s higher education

Education for kids |
A well-known proverb goes,” Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime.” There can be no greater gift than leaving your kids with the best university education you can afford.
Time spent at university usually results in countless experiences, both inside the lecture hall and outside, that enrich a young man or woman’s life for decades after. The Chinese have a compelling way of describing this phenomenon: ”Learning is a treasure that will follow its owner everywhere.”
Because of that stark truth, most of us dream of being able to say not proudly but honestly, “I have more than enough money to pay for my children’s university education.” Sadly, the vast majority of Malaysian parents cannot make that statement, and mean it, if the university education they’re eyeing for their kids lies far beyond our shores. The reason: Current and future exorbitant costs.
1. Preparation is key
Education costs have been escalating faster than the overall cost of living in most countries, including Malaysia. That’s why so many people feel that saving or generating enough money to pay for their kids’ tertiary education seems as unattainable to them as a tantalizing piece of cheddar dangling out of reach is to a lab rat.
Saving for your child’s education is getting more difficult as the education costs are escalating very fast. Most people feel that saving alone is no longer enough to pay for their children education especially parents who wish to send their children abroad.
Most parents still think that university education is too far away to be worried right now. There is plenty of time to plan, and child education can wait while money are spent on other things such as travel, new furniture, the car, golf, and a host of desirable items to enjoy. Sad to say, all these do not contribute to accumulating wealth or funds for child education.
As the old folks used to say “…at the blink of the eye, 30 to 40 years have passed us by.” Time passes by very quickly, and there is no turning back the clock. If savings and investments are not implemented early, parents will dearly miss the rule of compounding to meet child education objectives.
It is therefore important that parents embark on a regular savings program as early as possible in order to achieve the required child education fund. This is because inflation can erode the value of money over time and why your money should be put to work harder for you in order to compensate for the depreciation in value caused by inflation.
When should you start planning for a child’s college education? Ideally, as soon as the child is born. Don’t become alarmed if you haven’t started planning for your child’s college education. No matter what the child’s age, strategies are available to help you come up with the necessary funds. 
2. Rebalance and switch
You definitely need to be smart with your investment in order to save enough for education fund. Since the market is volatile, the best policy is keeping an eye on your portfolio regularly and rebalance and switch when necessary. You can afford to invest in more aggressive fund at the beginning however remember to switch back to income-preservation assets a few years before your child enter their University or college. Since properties offer a natural hedge again inflation, it becomes a natural asset class of choice among local lately.
3. Don’t forget your needs
While planning for children education, parents have to save for their retirement as well. However we advise that in extremely tight financial situation parents should make the retirement planning their top priority so that they won’t be financial burden on your children later.
 “Education is the birth right of every child 
and it is the key to the character building of a noble person ”

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